Correlation Between Ben Thanh and Viet Thanh
Can any of the company-specific risk be diversified away by investing in both Ben Thanh and Viet Thanh 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 Viet Thanh 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 Viet Thanh Plastic, you can compare the effects of market volatilities on Ben Thanh and Viet Thanh 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 Viet Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and Viet Thanh.
Diversification Opportunities for Ben Thanh and Viet Thanh
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ben and Viet is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber and Viet Thanh Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Thanh Plastic 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 Viet Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Thanh Plastic has no effect on the direction of Ben Thanh i.e., Ben Thanh and Viet Thanh go up and down completely randomly.
Pair Corralation between Ben Thanh and Viet Thanh
Assuming the 90 days trading horizon Ben Thanh Rubber is expected to under-perform the Viet Thanh. In addition to that, Ben Thanh is 2.02 times more volatile than Viet Thanh Plastic. It trades about -0.07 of its total potential returns per unit of risk. Viet Thanh Plastic is currently generating about 0.37 per unit of volatility. If you would invest 1,680,000 in Viet Thanh Plastic on November 7, 2024 and sell it today you would earn a total of 60,000 from holding Viet Thanh Plastic or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
Ben Thanh Rubber vs. Viet Thanh Plastic
Performance |
| Timeline |
| Ben Thanh Rubber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Viet Thanh Plastic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Ben Thanh and Viet Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ben Thanh and Viet Thanh
The main advantage of trading using opposite Ben Thanh and Viet Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh position performs unexpectedly, Viet Thanh 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 Viet Thanh will offset losses from the drop in Viet Thanh's long position.| Ben Thanh vs. FIT INVEST JSC | Ben Thanh vs. Damsan JSC | Ben Thanh vs. Binhthuan Agriculture Services | Ben Thanh vs. Bentre Aquaproduct Import |
| Viet Thanh vs. FIT INVEST JSC | Viet Thanh vs. Damsan JSC | Viet Thanh vs. Binhthuan Agriculture Services | Viet Thanh vs. Bentre Aquaproduct Import |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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