Correlation Between Long An and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Long An 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 Long An and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long An Food and Ben Thanh Rubber, you can compare the effects of market volatilities on Long An 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 Long An with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long An and Ben Thanh.
Diversification Opportunities for Long An and Ben Thanh
Very weak diversification
The 3 months correlation between Long and Ben is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Long An Food 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 Long An 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 Long An Food 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 Long An i.e., Long An and Ben Thanh go up and down completely randomly.
Pair Corralation between Long An and Ben Thanh
Assuming the 90 days trading horizon Long An Food is expected to generate 2.14 times more return on investment than Ben Thanh. However, Long An is 2.14 times more volatile than Ben Thanh Rubber. It trades about 0.18 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.12 per unit of risk. If you would invest 1,770,000 in Long An Food on October 26, 2024 and sell it today you would earn a total of 245,000 from holding Long An Food or generate 13.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.86% |
| Values | Daily Returns |
Long An Food vs. Ben Thanh Rubber
Performance |
| Timeline |
| Long An Food |
| Ben Thanh Rubber |
Long An and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long An and Ben Thanh
The main advantage of trading using opposite Long An and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long An 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.| Long An vs. Ben Thanh Rubber | Long An vs. Petrovietnam Technical Services | Long An vs. Telecoms Informatics JSC | Long An vs. Southern Rubber Industry |
| Ben Thanh vs. FIT INVEST JSC | Ben Thanh vs. Damsan JSC | Ben Thanh vs. An Phat Plastic | Ben Thanh 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 CEOs Directory module to screen CEOs from public companies around the world.
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