Correlation Between Bentre Aquaproduct and Ben Thanh

Can any of the company-specific risk be diversified away by investing in both Bentre Aquaproduct 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 Bentre Aquaproduct and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bentre Aquaproduct Import and Ben Thanh Rubber, you can compare the effects of market volatilities on Bentre Aquaproduct 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 Bentre Aquaproduct with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentre Aquaproduct and Ben Thanh.

Diversification Opportunities for Bentre Aquaproduct and Ben Thanh

-0.41

Correlation Coefficient

Bentre Aquaproduct  Ben Thanh

Very good diversification

The 3 months correlation between Bentre and Ben is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bentre Aquaproduct Import 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 Bentre Aquaproduct 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 Bentre Aquaproduct Import 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 Bentre Aquaproduct i.e., Bentre Aquaproduct and Ben Thanh go up and down completely randomly.

Pair Corralation between Bentre Aquaproduct and Ben Thanh

Assuming the 90 days trading horizon Bentre Aquaproduct is expected to generate 5.97 times less return on investment than Ben Thanh. But when comparing it to its historical volatility, Bentre Aquaproduct Import is 2.12 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 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,400,000  in Ben Thanh Rubber on October 20, 2024 and sell it today you would earn a total of  85,000  from holding Ben Thanh Rubber or generate 6.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.91%
Values	Daily Returns

Bentre Aquaproduct Import  vs.  Ben Thanh Rubber

Bentre Aquaproduct Import

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bentre Aquaproduct Import has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bentre Aquaproduct is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Ben Thanh Rubber

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ben Thanh Rubber are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Ben Thanh may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bentre Aquaproduct and Ben Thanh

The main advantage of trading using opposite Bentre Aquaproduct and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bentre Aquaproduct 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.

The idea behind Bentre Aquaproduct Import and Ben Thanh Rubber 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.