Correlation Between South Basic and Post
Can any of the company-specific risk be diversified away by investing in both South Basic and Post 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 South Basic and Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Basic Chemicals and Post and Telecommunications, you can compare the effects of market volatilities on South Basic and Post 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 South Basic with a short position of Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Basic and Post.
Diversification Opportunities for South Basic and Post
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and Post is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding South Basic Chemicals and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni and South Basic 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 South Basic Chemicals are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of South Basic i.e., South Basic and Post go up and down completely randomly.
Pair Corralation between South Basic and Post
Assuming the 90 days trading horizon South Basic Chemicals is expected to under-perform the Post. In addition to that, South Basic is 2.0 times more volatile than Post and Telecommunications. It trades about -0.04 of its total potential returns per unit of risk. Post and Telecommunications is currently generating about 0.0 per unit of volatility. If you would invest 510,000 in Post and Telecommunications on November 1, 2024 and sell it today you would lose (76,000) from holding Post and Telecommunications or give up 14.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Basic Chemicals vs. Post and Telecommunications
Performance |
| Timeline |
| South Basic Chemicals |
| Post and Telecommuni |
South Basic and Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Basic and Post
The main advantage of trading using opposite South Basic and Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Basic position performs unexpectedly, Post 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 Post will offset losses from the drop in Post's long position.| South Basic vs. Vnsteel Vicasa JSC | South Basic vs. Vietnam Airlines JSC | South Basic vs. BIDV Insurance Corp | South Basic vs. VietinBank Securities JSC |
| Post vs. Techno Agricultural Supplying | Post vs. Phuoc Hoa Rubber | Post vs. Vietnam Petroleum Transport | Post vs. Hai An Transport |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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