Correlation Between Ben Thanh and South Books

Can any of the company-specific risk be diversified away by investing in both Ben Thanh and South Books 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 South Books 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 South Books Educational, you can compare the effects of market volatilities on Ben Thanh and South Books 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 South Books. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ben Thanh and South Books.

Diversification Opportunities for Ben Thanh and South Books

0.11

Correlation Coefficient

Ben Thanh  South Books

Average diversification

The 3 months correlation between Ben and South is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ben Thanh Rubber and South Books Educational in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Books Educational 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 South Books. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Books Educational has no effect on the direction of Ben Thanh i.e., Ben Thanh and South Books go up and down completely randomly.

Pair Corralation between Ben Thanh and South Books

Assuming the 90 days trading horizon Ben Thanh is expected to generate 2.02 times less return on investment than South Books. But when comparing it to its historical volatility, Ben Thanh Rubber is 2.49 times less risky than South Books. It trades about 0.05 of its potential returns per unit of risk. South Books Educational is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,258,919  in South Books Educational on December 20, 2024 and sell it today you would earn a total of  41,081  from holding South Books Educational or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	72.41%
Values	Daily Returns

Ben Thanh Rubber  vs.  South Books Educational

Ben Thanh Rubber

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ben Thanh Rubber are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Ben Thanh is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

South Books Educational

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in South Books Educational are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, South Books may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ben Thanh and South Books

The main advantage of trading using opposite Ben Thanh and South Books positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ben Thanh position performs unexpectedly, South Books 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 South Books will offset losses from the drop in South Books' long position.

The idea behind Ben Thanh Rubber and South Books Educational 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.