Correlation Between Ben Thanh and Hanoi Plastics
Can any of the company-specific risk be diversified away by investing in both Ben Thanh and Hanoi Plastics 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 Hanoi Plastics 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 Hanoi Plastics JSC, you can compare the effects of market volatilities on Ben Thanh and Hanoi Plastics 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 Hanoi Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and Hanoi Plastics.
Diversification Opportunities for Ben Thanh and Hanoi Plastics
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ben and Hanoi is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber and Hanoi Plastics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Plastics 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 Hanoi Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Plastics JSC has no effect on the direction of Ben Thanh i.e., Ben Thanh and Hanoi Plastics go up and down completely randomly.
Pair Corralation between Ben Thanh and Hanoi Plastics
Assuming the 90 days trading horizon Ben Thanh Rubber is expected to generate 0.94 times more return on investment than Hanoi Plastics. However, Ben Thanh Rubber is 1.06 times less risky than Hanoi Plastics. It trades about 0.07 of its potential returns per unit of risk. Hanoi Plastics JSC is currently generating about 0.0 per unit of risk. If you would invest 807,690 in Ben Thanh Rubber on November 1, 2024 and sell it today you would earn a total of 622,310 from holding Ben Thanh Rubber or generate 77.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.14% |
| Values | Daily Returns |
Ben Thanh Rubber vs. Hanoi Plastics JSC
Performance |
| Timeline |
| Ben Thanh Rubber |
| Hanoi Plastics JSC |
Ben Thanh and Hanoi Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ben Thanh and Hanoi Plastics
The main advantage of trading using opposite Ben Thanh and Hanoi Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh position performs unexpectedly, Hanoi Plastics 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 Hanoi Plastics will offset losses from the drop in Hanoi Plastics' long position.| Ben Thanh vs. AgriBank Securities JSC | Ben Thanh vs. Tay Ninh Rubber | Ben Thanh vs. Thong Nhat Rubber | Ben Thanh vs. IDJ FINANCIAL |
| Hanoi Plastics vs. Song Hong Construction | Hanoi Plastics vs. Agriculture Printing and | Hanoi Plastics vs. Nafoods Group JSC | Hanoi Plastics vs. PostTelecommunication Equipment |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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