Correlation Between Tien Phong and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Tien Phong 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 Tien Phong and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Phong Plastic and Ben Thanh Rubber, you can compare the effects of market volatilities on Tien Phong 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 Tien Phong with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Phong and Ben Thanh.
Diversification Opportunities for Tien Phong and Ben Thanh
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tien and Ben is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tien Phong Plastic 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 Tien Phong 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 Tien Phong Plastic 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 Tien Phong i.e., Tien Phong and Ben Thanh go up and down completely randomly.
Pair Corralation between Tien Phong and Ben Thanh
Assuming the 90 days trading horizon Tien Phong Plastic is expected to generate 1.24 times more return on investment than Ben Thanh. However, Tien Phong is 1.24 times more volatile than Ben Thanh Rubber. It trades about 0.09 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.07 per unit of risk. If you would invest 3,063,079 in Tien Phong Plastic on September 1, 2024 and sell it today you would earn a total of 2,956,921 from holding Tien Phong Plastic or generate 96.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.97% |
| Values | Daily Returns |
Tien Phong Plastic vs. Ben Thanh Rubber
Performance |
| Timeline |
| Tien Phong Plastic |
| Ben Thanh Rubber |
Tien Phong and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Phong and Ben Thanh
The main advantage of trading using opposite Tien Phong and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Phong 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.| Tien Phong vs. FIT INVEST JSC | Tien Phong vs. Damsan JSC | Tien Phong vs. An Phat Plastic | Tien Phong vs. Alphanam ME |
| Ben Thanh vs. FIT INVEST JSC | Ben Thanh vs. Damsan JSC | Ben Thanh vs. An Phat Plastic | Ben Thanh 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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