Correlation Between Tay Ninh and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Tay Ninh 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 Tay Ninh and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tay Ninh Rubber and Ben Thanh Rubber, you can compare the effects of market volatilities on Tay Ninh 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 Tay Ninh with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and Ben Thanh.
Diversification Opportunities for Tay Ninh and Ben Thanh
Poor diversification
The 3 months correlation between Tay and Ben is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber 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 Tay Ninh 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 Tay Ninh Rubber 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 Tay Ninh i.e., Tay Ninh and Ben Thanh go up and down completely randomly.
Pair Corralation between Tay Ninh and Ben Thanh
Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 3.16 times more return on investment than Ben Thanh. However, Tay Ninh is 3.16 times more volatile than Ben Thanh Rubber. It trades about 0.52 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.06 per unit of risk. If you would invest 5,280,000 in Tay Ninh Rubber on November 8, 2024 and sell it today you would earn a total of 2,010,000 from holding Tay Ninh Rubber or generate 38.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Tay Ninh Rubber vs. Ben Thanh Rubber
Performance |
| Timeline |
| Tay Ninh Rubber |
| Ben Thanh Rubber |
Tay Ninh and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tay Ninh and Ben Thanh
The main advantage of trading using opposite Tay Ninh and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tay Ninh 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.| Tay Ninh vs. FIT INVEST JSC | Tay Ninh vs. Damsan JSC | Tay Ninh vs. An Phat Plastic | Tay Ninh vs. APG Securities Joint |
| Ben Thanh vs. Long An Food | Ben Thanh vs. Hoang Huy Investment | Ben Thanh vs. Nam Long Investment | Ben Thanh vs. Ba Ria Thermal |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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