Correlation Between Plastic Additives and Bao Ngoc
Can any of the company-specific risk be diversified away by investing in both Plastic Additives and Bao Ngoc 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 Plastic Additives and Bao Ngoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Additives JSC and Bao Ngoc Investment, you can compare the effects of market volatilities on Plastic Additives and Bao Ngoc 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 Plastic Additives with a short position of Bao Ngoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Additives and Bao Ngoc.
Diversification Opportunities for Plastic Additives and Bao Ngoc
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plastic and Bao is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Additives JSC and Bao Ngoc Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bao Ngoc Investment and Plastic Additives 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 Plastic Additives JSC are associated (or correlated) with Bao Ngoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bao Ngoc Investment has no effect on the direction of Plastic Additives i.e., Plastic Additives and Bao Ngoc go up and down completely randomly.
Pair Corralation between Plastic Additives and Bao Ngoc
Assuming the 90 days trading horizon Plastic Additives JSC is expected to generate 1.88 times more return on investment than Bao Ngoc. However, Plastic Additives is 1.88 times more volatile than Bao Ngoc Investment. It trades about 0.13 of its potential returns per unit of risk. Bao Ngoc Investment is currently generating about 0.07 per unit of risk. If you would invest 840,000 in Plastic Additives JSC on September 5, 2024 and sell it today you would earn a total of 100,000 from holding Plastic Additives JSC or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Plastic Additives JSC vs. Bao Ngoc Investment
Performance |
| Timeline |
| Plastic Additives JSC |
| Bao Ngoc Investment |
Plastic Additives and Bao Ngoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Additives and Bao Ngoc
The main advantage of trading using opposite Plastic Additives and Bao Ngoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Additives position performs unexpectedly, Bao Ngoc 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 Bao Ngoc will offset losses from the drop in Bao Ngoc's long position.| Plastic Additives vs. Alphanam ME | Plastic Additives vs. Hochiminh City Metal | Plastic Additives vs. Atesco Industrial Cartering | Plastic Additives vs. Danang Education Investment |
| Bao Ngoc vs. FIT INVEST JSC | Bao Ngoc vs. Damsan JSC | Bao Ngoc vs. An Phat Plastic | Bao Ngoc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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