Correlation Between Binh Duong and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Binh Duong 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 Binh Duong and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Duong Trade and Ben Thanh Rubber, you can compare the effects of market volatilities on Binh Duong 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 Binh Duong with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Ben Thanh.
Diversification Opportunities for Binh Duong and Ben Thanh
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Binh and Ben is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Trade 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 Binh Duong 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 Binh Duong Trade 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 Binh Duong i.e., Binh Duong and Ben Thanh go up and down completely randomly.
Pair Corralation between Binh Duong and Ben Thanh
Assuming the 90 days trading horizon Binh Duong is expected to generate 4.79 times less return on investment than Ben Thanh. But when comparing it to its historical volatility, Binh Duong Trade is 1.12 times less risky than Ben Thanh. It trades about 0.08 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,305,000 in Ben Thanh Rubber on August 31, 2024 and sell it today you would earn a total of 100,000 from holding Ben Thanh Rubber or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Duong Trade vs. Ben Thanh Rubber
Performance |
| Timeline |
| Binh Duong Trade |
| Ben Thanh Rubber |
Binh Duong and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Ben Thanh
The main advantage of trading using opposite Binh Duong and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong 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.| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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