Correlation Between SMC Investment and Binh Minh
Can any of the company-specific risk be diversified away by investing in both SMC Investment and Binh Minh 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 SMC Investment and Binh Minh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Investment Trading and Binh Minh Plastics, you can compare the effects of market volatilities on SMC Investment and Binh Minh 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 SMC Investment with a short position of Binh Minh. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Investment and Binh Minh.
Diversification Opportunities for SMC Investment and Binh Minh
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMC and Binh is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SMC Investment Trading and Binh Minh Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Minh Plastics and SMC Investment 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 SMC Investment Trading are associated (or correlated) with Binh Minh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Minh Plastics has no effect on the direction of SMC Investment i.e., SMC Investment and Binh Minh go up and down completely randomly.
Pair Corralation between SMC Investment and Binh Minh
Assuming the 90 days trading horizon SMC Investment Trading is expected to under-perform the Binh Minh. In addition to that, SMC Investment is 1.55 times more volatile than Binh Minh Plastics. It trades about -0.02 of its total potential returns per unit of risk. Binh Minh Plastics is currently generating about 0.17 per unit of volatility. If you would invest 12,530,000 in Binh Minh Plastics on October 12, 2024 and sell it today you would earn a total of 970,000 from holding Binh Minh Plastics or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SMC Investment Trading vs. Binh Minh Plastics
Performance |
| Timeline |
| SMC Investment Trading |
| Binh Minh Plastics |
SMC Investment and Binh Minh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Investment and Binh Minh
The main advantage of trading using opposite SMC Investment and Binh Minh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Investment position performs unexpectedly, Binh Minh 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 Minh will offset losses from the drop in Binh Minh's long position.| SMC Investment vs. Din Capital Investment | SMC Investment vs. Danang Education Investment | SMC Investment vs. Materials Petroleum JSC | SMC Investment vs. Ben Thanh Rubber |
| Binh Minh vs. BIDV Insurance Corp | Binh Minh vs. BaoMinh Insurance Corp | Binh Minh vs. CEO Group JSC | Binh Minh vs. Saigon Viendong Technology |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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