Correlation Between Viet Thanh and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Viet Thanh 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 Viet Thanh and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Thanh Plastic and Ben Thanh Rubber, you can compare the effects of market volatilities on Viet Thanh 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 Viet Thanh with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Ben Thanh.
Diversification Opportunities for Viet Thanh and Ben Thanh
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Viet and Ben is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic 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 Viet Thanh 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 Viet Thanh Plastic 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 Viet Thanh i.e., Viet Thanh and Ben Thanh go up and down completely randomly.
Pair Corralation between Viet Thanh and Ben Thanh
Assuming the 90 days trading horizon Viet Thanh Plastic is expected to generate 0.55 times more return on investment than Ben Thanh. However, Viet Thanh Plastic is 1.81 times less risky than Ben Thanh. It trades about 0.49 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.01 per unit of risk. If you would invest 1,680,000 in Viet Thanh Plastic on November 8, 2024 and sell it today you would earn a total of 90,000 from holding Viet Thanh Plastic or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Ben Thanh Rubber
Performance |
| Timeline |
| Viet Thanh Plastic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Ben Thanh Rubber |
Viet Thanh and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Ben Thanh
The main advantage of trading using opposite Viet Thanh and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh 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.| Viet Thanh vs. Phuoc Hoa Rubber | Viet Thanh vs. HVC Investment and | Viet Thanh vs. Pha Le Plastics | Viet Thanh vs. An Phat Plastic |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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