Correlation Between Saigon Beer and Tien Giang

Can any of the company-specific risk be diversified away by investing in both Saigon Beer and Tien Giang at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Saigon Beer and Tien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saigon Beer Alcohol and Tien Giang Investment, you can compare the effects of market volatilities on Saigon Beer and Tien Giang and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Saigon Beer with a short position of Tien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Beer and Tien Giang.

Diversification Opportunities for Saigon Beer and Tien Giang

0.49

Correlation Coefficient

Saigon Beer  Tien Giang

Very weak diversification

The 3 months correlation between Saigon and Tien is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and Tien Giang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Giang Investment and Saigon Beer is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Saigon Beer Alcohol are associated (or correlated) with Tien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Giang Investment has no effect on the direction of Saigon Beer i.e., Saigon Beer and Tien Giang go up and down completely randomly.

Pair Corralation between Saigon Beer and Tien Giang

Assuming the 90 days trading horizon Saigon Beer is expected to generate 53.28 times less return on investment than Tien Giang. But when comparing it to its historical volatility, Saigon Beer Alcohol is 1.23 times less risky than Tien Giang. It trades about 0.0 of its potential returns per unit of risk. Tien Giang Investment is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,401,099  in Tien Giang Investment on September 29, 2024 and sell it today you would earn a total of  568,901  from holding Tien Giang Investment or generate 12.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Saigon Beer Alcohol  vs.  Tien Giang Investment

Saigon Beer Alcohol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saigon Beer Alcohol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Saigon Beer is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Tien Giang Investment

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Giang Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Tien Giang may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Saigon Beer and Tien Giang

The main advantage of trading using opposite Saigon Beer and Tien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Beer position performs unexpectedly, Tien Giang can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tien Giang will offset losses from the drop in Tien Giang's long position.

The idea behind Saigon Beer Alcohol and Tien Giang Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.