Correlation Between Hanoi Plastics and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Binh Duong 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 Hanoi Plastics and Binh Duong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanoi Plastics JSC and Binh Duong Construction, you can compare the effects of market volatilities on Hanoi Plastics and Binh Duong 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 Hanoi Plastics with a short position of Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Binh Duong.
Diversification Opportunities for Hanoi Plastics and Binh Duong
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanoi and Binh is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Binh Duong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Construction and Hanoi Plastics 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 Hanoi Plastics JSC are associated (or correlated) with Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Construction has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Binh Duong go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Binh Duong
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to under-perform the Binh Duong. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Plastics JSC is 1.24 times less risky than Binh Duong. The stock trades about -0.32 of its potential returns per unit of risk. The Binh Duong Construction is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 580,000 in Binh Duong Construction on September 1, 2024 and sell it today you would earn a total of 113,000 from holding Binh Duong Construction or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Binh Duong Construction
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Binh Duong Construction |
Hanoi Plastics and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Binh Duong
The main advantage of trading using opposite Hanoi Plastics and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.| Hanoi Plastics vs. FIT INVEST JSC | Hanoi Plastics vs. Damsan JSC | Hanoi Plastics vs. An Phat Plastic | Hanoi Plastics vs. Alphanam ME |
| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong vs. Alphanam ME |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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