Correlation Between Pha Le and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Pha Le 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 Pha Le and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Le Plastics and Ben Thanh Rubber, you can compare the effects of market volatilities on Pha Le 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 Pha Le with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Le and Ben Thanh.
Diversification Opportunities for Pha Le and Ben Thanh
Pay attention - limited upside
The 3 months correlation between Pha and Ben is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pha Le Plastics 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 Pha Le 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 Pha Le Plastics 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 Pha Le i.e., Pha Le and Ben Thanh go up and down completely randomly.
Pair Corralation between Pha Le and Ben Thanh
Assuming the 90 days trading horizon Pha Le Plastics is expected to under-perform the Ben Thanh. In addition to that, Pha Le is 1.47 times more volatile than Ben Thanh Rubber. It trades about -0.1 of its total potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.23 per unit of volatility. If you would invest 1,335,000 in Ben Thanh Rubber on August 27, 2024 and sell it today you would earn a total of 75,000 from holding Ben Thanh Rubber or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pha Le Plastics vs. Ben Thanh Rubber
Performance |
| Timeline |
| Pha Le Plastics |
| Ben Thanh Rubber |
Pha Le and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Le and Ben Thanh
The main advantage of trading using opposite Pha Le and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Le 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.| Pha Le vs. FIT INVEST JSC | Pha Le vs. Damsan JSC | Pha Le vs. An Phat Plastic | Pha Le vs. APG Securities Joint |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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