Correlation Between Ben Thanh and Post
Can any of the company-specific risk be diversified away by investing in both Ben Thanh and Post 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 Ben Thanh and Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ben Thanh Rubber and Post and Telecommunications, you can compare the effects of market volatilities on Ben Thanh and Post 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 Ben Thanh with a short position of Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and Post.
Diversification Opportunities for Ben Thanh and Post
Pay attention - limited upside
The 3 months correlation between Ben and Post is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni and Ben 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 Ben Thanh Rubber are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Ben Thanh i.e., Ben Thanh and Post go up and down completely randomly.
Pair Corralation between Ben Thanh and Post
Assuming the 90 days trading horizon Ben Thanh Rubber is expected to generate 0.35 times more return on investment than Post. However, Ben Thanh Rubber is 2.85 times less risky than Post. It trades about 0.21 of its potential returns per unit of risk. Post and Telecommunications is currently generating about -0.05 per unit of risk. If you would invest 1,255,000 in Ben Thanh Rubber on September 15, 2024 and sell it today you would earn a total of 140,000 from holding Ben Thanh Rubber or generate 11.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ben Thanh Rubber vs. Post and Telecommunications
Performance |
Timeline |
Ben Thanh Rubber |
Post and Telecommuni |
Ben Thanh and Post Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ben Thanh and Post
The main advantage of trading using opposite Ben Thanh and Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh position performs unexpectedly, Post 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 Post will offset losses from the drop in Post's long position.Ben Thanh vs. Transport and Industry | ||
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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