Correlation Between 1369 Construction and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both 1369 Construction and Ben 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 1369 Construction and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1369 Construction JSC and Ben Thanh Rubber, you can compare the effects of market volatilities on 1369 Construction and Ben 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 1369 Construction with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1369 Construction and Ben Thanh.
Diversification Opportunities for 1369 Construction and Ben Thanh
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 1369 and Ben is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding 1369 Construction JSC and Ben Thanh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ben Thanh Rubber and 1369 Construction 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 1369 Construction JSC are associated (or correlated) with Ben Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ben Thanh Rubber has no effect on the direction of 1369 Construction i.e., 1369 Construction and Ben Thanh go up and down completely randomly.
Pair Corralation between 1369 Construction and Ben Thanh
Assuming the 90 days trading horizon 1369 Construction is expected to generate 2.27 times less return on investment than Ben Thanh. In addition to that, 1369 Construction is 1.45 times more volatile than Ben Thanh Rubber. It trades about 0.02 of its total potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.08 per unit of volatility. If you would invest 767,690 in Ben Thanh Rubber on September 4, 2024 and sell it today you would earn a total of 632,310 from holding Ben Thanh Rubber or generate 82.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.11% |
| Values | Daily Returns |
1369 Construction JSC vs. Ben Thanh Rubber
Performance |
| Timeline |
| 1369 Construction JSC |
| Ben Thanh Rubber |
1369 Construction and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1369 Construction and Ben Thanh
The main advantage of trading using opposite 1369 Construction and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1369 Construction position performs unexpectedly, Ben 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 Ben Thanh will offset losses from the drop in Ben Thanh's long position.| 1369 Construction vs. Century Synthetic Fiber | 1369 Construction vs. Ba Ria Thermal | 1369 Construction vs. PetroVietnam Drilling Well | 1369 Construction vs. Hanoi Beer Alcohol |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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