Correlation Between Binh Minh and Materials Petroleum
Can any of the company-specific risk be diversified away by investing in both Binh Minh and Materials Petroleum 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 Minh and Materials Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Minh Plastics and Materials Petroleum JSC, you can compare the effects of market volatilities on Binh Minh and Materials Petroleum 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 Minh with a short position of Materials Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Minh and Materials Petroleum.
Diversification Opportunities for Binh Minh and Materials Petroleum
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binh and Materials is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Binh Minh Plastics and Materials Petroleum JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Petroleum JSC and Binh Minh 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 Minh Plastics are associated (or correlated) with Materials Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Petroleum JSC has no effect on the direction of Binh Minh i.e., Binh Minh and Materials Petroleum go up and down completely randomly.
Pair Corralation between Binh Minh and Materials Petroleum
Assuming the 90 days trading horizon Binh Minh Plastics is expected to generate 0.79 times more return on investment than Materials Petroleum. However, Binh Minh Plastics is 1.26 times less risky than Materials Petroleum. It trades about 0.17 of its potential returns per unit of risk. Materials Petroleum JSC is currently generating about -0.14 per unit of risk. If you would invest 12,530,000 in Binh Minh Plastics on October 12, 2024 and sell it today you would earn a total of 970,000 from holding Binh Minh Plastics or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Binh Minh Plastics vs. Materials Petroleum JSC
Performance |
| Timeline |
| Binh Minh Plastics |
| Materials Petroleum JSC |
Binh Minh and Materials Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Minh and Materials Petroleum
The main advantage of trading using opposite Binh Minh and Materials Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Minh position performs unexpectedly, Materials Petroleum 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 Materials Petroleum will offset losses from the drop in Materials Petroleum's long position.| Binh Minh vs. BIDV Insurance Corp | Binh Minh vs. BaoMinh Insurance Corp | Binh Minh vs. CEO Group JSC | Binh Minh vs. Saigon Viendong Technology |
| Materials Petroleum vs. FIT INVEST JSC | Materials Petroleum vs. Damsan JSC | Materials Petroleum vs. An Phat Plastic | Materials Petroleum 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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