Correlation Between Ben Thanh and Materials Petroleum
Can any of the company-specific risk be diversified away by investing in both Ben Thanh 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 Ben Thanh and Materials Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ben Thanh Rubber and Materials Petroleum JSC, you can compare the effects of market volatilities on Ben Thanh 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 Ben Thanh with a short position of Materials Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and Materials Petroleum.
Diversification Opportunities for Ben Thanh and Materials Petroleum
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ben and Materials is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber 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 Ben Thanh 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 Ben Thanh Rubber 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 Ben Thanh i.e., Ben Thanh and Materials Petroleum go up and down completely randomly.
Pair Corralation between Ben Thanh and Materials Petroleum
Assuming the 90 days trading horizon Ben Thanh Rubber is expected to generate 0.42 times more return on investment than Materials Petroleum. However, Ben Thanh Rubber is 2.4 times less risky than Materials Petroleum. It trades about 0.06 of its potential returns per unit of risk. Materials Petroleum JSC is currently generating about 0.01 per unit of risk. If you would invest 1,015,381 in Ben Thanh Rubber on October 12, 2024 and sell it today you would earn a total of 424,619 from holding Ben Thanh Rubber or generate 41.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 60.69% |
| Values | Daily Returns |
Ben Thanh Rubber vs. Materials Petroleum JSC
Performance |
| Timeline |
| Ben Thanh Rubber |
| Materials Petroleum JSC |
Ben Thanh and Materials Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ben Thanh and Materials Petroleum
The main advantage of trading using opposite Ben Thanh and Materials Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh 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.| Ben Thanh vs. Hochiminh City Metal | Ben Thanh vs. Vietnam JSCmmercial Bank | Ben Thanh vs. Elcom Technology Communications | Ben Thanh vs. Ba Ria Thermal |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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