Correlation Between Ben Thanh and Post

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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

BenPostDiversified AwayBenPostDiversified Away100%
-0.82
  Correlation Coefficient

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 Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ben Thanh Rubber  vs.  Post and Telecommunications

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -10-50510
JavaScript chart by amCharts 3.21.15BRC PTC
       Timeline  
Ben Thanh Rubber 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ben Thanh Rubber are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Ben Thanh may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec12,50013,00013,50014,00014,500
Post and Telecommuni 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Post and Telecommunications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec4,4004,5004,6004,7004,8004,9005,0005,1005,200

Ben Thanh and Post Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.39-1.8-1.21-0.62-0.02990.611.271.922.583.23 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15BRC PTC
       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.
The idea behind Ben Thanh Rubber and Post and Telecommunications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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