Correlation Between Binh Duong and Danang Rubber
Can any of the company-specific risk be diversified away by investing in both Binh Duong and Danang Rubber 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 Binh Duong and Danang Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Duong Construction and Danang Rubber JSC, you can compare the effects of market volatilities on Binh Duong and Danang Rubber 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 Binh Duong with a short position of Danang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Danang Rubber.
Diversification Opportunities for Binh Duong and Danang Rubber
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binh and Danang is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Construction and Danang Rubber JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Rubber JSC and Binh Duong 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 Binh Duong Construction are associated (or correlated) with Danang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Rubber JSC has no effect on the direction of Binh Duong i.e., Binh Duong and Danang Rubber go up and down completely randomly.
Pair Corralation between Binh Duong and Danang Rubber
Assuming the 90 days trading horizon Binh Duong Construction is expected to generate 1.4 times more return on investment than Danang Rubber. However, Binh Duong is 1.4 times more volatile than Danang Rubber JSC. It trades about 0.51 of its potential returns per unit of risk. Danang Rubber JSC is currently generating about 0.04 per unit of risk. If you would invest 580,000 in Binh Duong Construction on September 1, 2024 and sell it today you would earn a total of 113,000 from holding Binh Duong Construction or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Duong Construction vs. Danang Rubber JSC
Performance |
| Timeline |
| Binh Duong Construction |
| Danang Rubber JSC |
Binh Duong and Danang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Danang Rubber
The main advantage of trading using opposite Binh Duong and Danang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong position performs unexpectedly, Danang Rubber 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 Danang Rubber will offset losses from the drop in Danang Rubber's long position.| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong vs. Alphanam ME |
| Danang Rubber vs. FIT INVEST JSC | Danang Rubber vs. Damsan JSC | Danang Rubber vs. An Phat Plastic | Danang Rubber vs. Alphanam ME |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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