Correlation Between Ben Thanh and Petrolimex Petrochemical
Can any of the company-specific risk be diversified away by investing in both Ben Thanh and Petrolimex Petrochemical 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 Petrolimex Petrochemical 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 Petrolimex Petrochemical JSC, you can compare the effects of market volatilities on Ben Thanh and Petrolimex Petrochemical 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 Petrolimex Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and Petrolimex Petrochemical.
Diversification Opportunities for Ben Thanh and Petrolimex Petrochemical
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ben and Petrolimex is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber and Petrolimex Petrochemical JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Petrochemical 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 Petrolimex Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Petrochemical has no effect on the direction of Ben Thanh i.e., Ben Thanh and Petrolimex Petrochemical go up and down completely randomly.
Pair Corralation between Ben Thanh and Petrolimex Petrochemical
Assuming the 90 days trading horizon Ben Thanh Rubber is expected to generate 0.48 times more return on investment than Petrolimex Petrochemical. However, Ben Thanh Rubber is 2.07 times less risky than Petrolimex Petrochemical. It trades about 0.33 of its potential returns per unit of risk. Petrolimex Petrochemical JSC is currently generating about -0.14 per unit of risk. If you would invest 1,310,000 in Ben Thanh Rubber on September 1, 2024 and sell it today you would earn a total of 95,000 from holding Ben Thanh Rubber or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ben Thanh Rubber vs. Petrolimex Petrochemical JSC
Performance |
| Timeline |
| Ben Thanh Rubber |
| Petrolimex Petrochemical |
Ben Thanh and Petrolimex Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ben Thanh and Petrolimex Petrochemical
The main advantage of trading using opposite Ben Thanh and Petrolimex Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh position performs unexpectedly, Petrolimex Petrochemical 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 Petrolimex Petrochemical will offset losses from the drop in Petrolimex Petrochemical'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 |
| Petrolimex Petrochemical vs. FIT INVEST JSC | Petrolimex Petrochemical vs. Damsan JSC | Petrolimex Petrochemical vs. An Phat Plastic | Petrolimex Petrochemical vs. Alphanam ME |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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