Correlation Between Ben Thanh and Hai An
Can any of the company-specific risk be diversified away by investing in both Ben Thanh and Hai An 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 Hai An 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 Hai An Transport, you can compare the effects of market volatilities on Ben Thanh and Hai An 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 Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and Hai An.
Diversification Opportunities for Ben Thanh and Hai An
Almost no diversification
The 3 months correlation between Ben and Hai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber and Hai An Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hai An Transport 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 Hai An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hai An Transport has no effect on the direction of Ben Thanh i.e., Ben Thanh and Hai An go up and down completely randomly.
Pair Corralation between Ben Thanh and Hai An
Assuming the 90 days trading horizon Ben Thanh is expected to generate 1.38 times less return on investment than Hai An. But when comparing it to its historical volatility, Ben Thanh Rubber is 1.23 times less risky than Hai An. It trades about 0.07 of its potential returns per unit of risk. Hai An Transport is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,579,710 in Hai An Transport on September 1, 2024 and sell it today you would earn a total of 2,225,290 from holding Hai An Transport or generate 86.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.97% |
| Values | Daily Returns |
Ben Thanh Rubber vs. Hai An Transport
Performance |
| Timeline |
| Ben Thanh Rubber |
| Hai An Transport |
Ben Thanh and Hai An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ben Thanh and Hai An
The main advantage of trading using opposite Ben Thanh and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh position performs unexpectedly, Hai An 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 Hai An will offset losses from the drop in Hai An's long position.| Ben Thanh vs. FIT INVEST JSC | Ben Thanh vs. Damsan JSC | Ben Thanh vs. An Phat Plastic | Ben Thanh vs. Alphanam ME |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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