Correlation Between Ben Thanh and SCG Construction
Can any of the company-specific risk be diversified away by investing in both Ben Thanh and SCG Construction 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 SCG Construction 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 SCG Construction JSC, you can compare the effects of market volatilities on Ben Thanh and SCG Construction 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 SCG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and SCG Construction.
Diversification Opportunities for Ben Thanh and SCG Construction
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ben and SCG is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber and SCG Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG Construction 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 SCG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG Construction JSC has no effect on the direction of Ben Thanh i.e., Ben Thanh and SCG Construction go up and down completely randomly.
Pair Corralation between Ben Thanh and SCG Construction
Assuming the 90 days trading horizon Ben Thanh Rubber is expected to under-perform the SCG Construction. But the stock apears to be less risky and, when comparing its historical volatility, Ben Thanh Rubber is 2.95 times less risky than SCG Construction. The stock trades about -0.33 of its potential returns per unit of risk. The SCG Construction JSC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,550,000 in SCG Construction JSC on January 8, 2025 and sell it today you would earn a total of 240,000 from holding SCG Construction JSC or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ben Thanh Rubber vs. SCG Construction JSC
Performance |
| Timeline |
| Ben Thanh Rubber |
| SCG Construction JSC |
Ben Thanh and SCG Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ben Thanh and SCG Construction
The main advantage of trading using opposite Ben Thanh and SCG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh position performs unexpectedly, SCG Construction 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 SCG Construction will offset losses from the drop in SCG Construction's long position.| Ben Thanh vs. FIT INVEST JSC | Ben Thanh vs. Damsan JSC | Ben Thanh vs. Alphanam ME | Ben Thanh vs. APG Securities Joint |
| SCG Construction vs. FIT INVEST JSC | SCG Construction vs. Damsan JSC | SCG Construction vs. Alphanam ME | SCG Construction 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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