Correlation Between Binh Duong and Hanoi Plastics
Can any of the company-specific risk be diversified away by investing in both Binh Duong and Hanoi Plastics 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 Hanoi Plastics 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 Hanoi Plastics JSC, you can compare the effects of market volatilities on Binh Duong and Hanoi Plastics 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 Hanoi Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Hanoi Plastics.
Diversification Opportunities for Binh Duong and Hanoi Plastics
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Binh and Hanoi is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Construction and Hanoi Plastics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Plastics 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 Hanoi Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Plastics JSC has no effect on the direction of Binh Duong i.e., Binh Duong and Hanoi Plastics go up and down completely randomly.
Pair Corralation between Binh Duong and Hanoi Plastics
Assuming the 90 days trading horizon Binh Duong is expected to generate 1.06 times less return on investment than Hanoi Plastics. But when comparing it to its historical volatility, Binh Duong Construction is 1.38 times less risky than Hanoi Plastics. It trades about 0.02 of its potential returns per unit of risk. Hanoi Plastics JSC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,283,156 in Hanoi Plastics JSC on August 27, 2024 and sell it today you would earn a total of 31,844 from holding Hanoi Plastics JSC or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Duong Construction vs. Hanoi Plastics JSC
Performance |
| Timeline |
| Binh Duong Construction |
| Hanoi Plastics JSC |
Binh Duong and Hanoi Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Hanoi Plastics
The main advantage of trading using opposite Binh Duong and Hanoi Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong position performs unexpectedly, Hanoi Plastics 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 Hanoi Plastics will offset losses from the drop in Hanoi Plastics' long position.| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong vs. APG Securities Joint |
| Hanoi Plastics vs. FIT INVEST JSC | Hanoi Plastics vs. Damsan JSC | Hanoi Plastics vs. An Phat Plastic | Hanoi Plastics vs. APG Securities Joint |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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