Correlation Between Bao Ngoc and Plastic Additives
Can any of the company-specific risk be diversified away by investing in both Bao Ngoc and Plastic Additives 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 Bao Ngoc and Plastic Additives into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bao Ngoc Investment and Plastic Additives JSC, you can compare the effects of market volatilities on Bao Ngoc and Plastic Additives 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 Bao Ngoc with a short position of Plastic Additives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bao Ngoc and Plastic Additives.
Diversification Opportunities for Bao Ngoc and Plastic Additives
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bao and Plastic is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bao Ngoc Investment and Plastic Additives JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Additives JSC and Bao Ngoc 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 Bao Ngoc Investment are associated (or correlated) with Plastic Additives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Additives JSC has no effect on the direction of Bao Ngoc i.e., Bao Ngoc and Plastic Additives go up and down completely randomly.
Pair Corralation between Bao Ngoc and Plastic Additives
Assuming the 90 days trading horizon Bao Ngoc Investment is expected to under-perform the Plastic Additives. But the stock apears to be less risky and, when comparing its historical volatility, Bao Ngoc Investment is 3.09 times less risky than Plastic Additives. The stock trades about -0.14 of its potential returns per unit of risk. The Plastic Additives JSC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 990,000 in Plastic Additives JSC on September 12, 2024 and sell it today you would earn a total of 30,000 from holding Plastic Additives JSC or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bao Ngoc Investment vs. Plastic Additives JSC
Performance |
| Timeline |
| Bao Ngoc Investment |
| Plastic Additives JSC |
Bao Ngoc and Plastic Additives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bao Ngoc and Plastic Additives
The main advantage of trading using opposite Bao Ngoc and Plastic Additives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bao Ngoc position performs unexpectedly, Plastic Additives 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 Plastic Additives will offset losses from the drop in Plastic Additives' long position.| Bao Ngoc vs. FIT INVEST JSC | Bao Ngoc vs. Damsan JSC | Bao Ngoc vs. An Phat Plastic | Bao Ngoc vs. Alphanam ME |
| Plastic Additives vs. Vina2 Investment and | Plastic Additives vs. Hai An Transport | Plastic Additives vs. South Basic Chemicals | Plastic Additives vs. Transport and Industry |
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 Stocks Directory module to find actively traded stocks across global markets.
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