Correlation Between Ben Thanh and Vietnam Rubber
Can any of the company-specific risk be diversified away by investing in both Ben Thanh and Vietnam Rubber 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 Vietnam Rubber 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 Vietnam Rubber Group, you can compare the effects of market volatilities on Ben Thanh and Vietnam Rubber 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 Vietnam Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and Vietnam Rubber.
Diversification Opportunities for Ben Thanh and Vietnam Rubber
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ben and Vietnam is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber and Vietnam Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Rubber Group 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 Vietnam Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Rubber Group has no effect on the direction of Ben Thanh i.e., Ben Thanh and Vietnam Rubber go up and down completely randomly.
Pair Corralation between Ben Thanh and Vietnam Rubber
Assuming the 90 days trading horizon Ben Thanh Rubber is expected to generate 0.56 times more return on investment than Vietnam Rubber. However, Ben Thanh Rubber is 1.79 times less risky than Vietnam Rubber. It trades about 0.25 of its potential returns per unit of risk. Vietnam Rubber Group is currently generating about -0.21 per unit of risk. If you would invest 1,280,000 in Ben Thanh Rubber on August 27, 2024 and sell it today you would earn a total of 130,000 from holding Ben Thanh Rubber or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ben Thanh Rubber vs. Vietnam Rubber Group
Performance |
| Timeline |
| Ben Thanh Rubber |
| Vietnam Rubber Group |
Ben Thanh and Vietnam Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ben Thanh and Vietnam Rubber
The main advantage of trading using opposite Ben Thanh and Vietnam Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh position performs unexpectedly, Vietnam Rubber 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 Vietnam Rubber will offset losses from the drop in Vietnam Rubber's long position.| Ben Thanh vs. FIT INVEST JSC | Ben Thanh vs. Damsan JSC | Ben Thanh vs. An Phat Plastic | Ben Thanh vs. APG Securities Joint |
| Vietnam Rubber vs. FIT INVEST JSC | Vietnam Rubber vs. Damsan JSC | Vietnam Rubber vs. An Phat Plastic | Vietnam Rubber 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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