Correlation Between Bich Chi and Van Dien
Can any of the company-specific risk be diversified away by investing in both Bich Chi and Van Dien 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 Bich Chi and Van Dien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bich Chi Food and Van Dien Fused, you can compare the effects of market volatilities on Bich Chi and Van Dien 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 Bich Chi with a short position of Van Dien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bich Chi and Van Dien.
Diversification Opportunities for Bich Chi and Van Dien
Very weak diversification
The 3 months correlation between Bich and Van is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bich Chi Food and Van Dien Fused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Dien Fused and Bich Chi 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 Bich Chi Food are associated (or correlated) with Van Dien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Dien Fused has no effect on the direction of Bich Chi i.e., Bich Chi and Van Dien go up and down completely randomly.
Pair Corralation between Bich Chi and Van Dien
Assuming the 90 days trading horizon Bich Chi Food is expected to generate 0.85 times more return on investment than Van Dien. However, Bich Chi Food is 1.18 times less risky than Van Dien. It trades about 0.1 of its potential returns per unit of risk. Van Dien Fused is currently generating about 0.04 per unit of risk. If you would invest 2,732,234 in Bich Chi Food on September 14, 2024 and sell it today you would earn a total of 1,317,766 from holding Bich Chi Food or generate 48.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.5% |
| Values | Daily Returns |
Bich Chi Food vs. Van Dien Fused
Performance |
| Timeline |
| Bich Chi Food |
| Van Dien Fused |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bich Chi and Van Dien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bich Chi and Van Dien
The main advantage of trading using opposite Bich Chi and Van Dien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bich Chi position performs unexpectedly, Van Dien 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 Van Dien will offset losses from the drop in Van Dien's long position.| Bich Chi vs. FIT INVEST JSC | Bich Chi vs. Damsan JSC | Bich Chi vs. An Phat Plastic | Bich Chi vs. Alphanam ME |
| Van Dien vs. Elcom Technology Communications | Van Dien vs. Materials Petroleum JSC | Van Dien vs. Danang Rubber JSC | Van Dien vs. FPT Digital Retail |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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