Correlation Between Vietnam JSCmmercial and Binh Thanh
Can any of the company-specific risk be diversified away by investing in both Vietnam JSCmmercial and Binh 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 Vietnam JSCmmercial and Binh Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam JSCmmercial Bank and Binh Thanh Import, you can compare the effects of market volatilities on Vietnam JSCmmercial and Binh 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 Vietnam JSCmmercial with a short position of Binh Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam JSCmmercial and Binh Thanh.
Diversification Opportunities for Vietnam JSCmmercial and Binh Thanh
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vietnam and Binh is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam JSCmmercial Bank and Binh Thanh Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Thanh Import and Vietnam JSCmmercial 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 Vietnam JSCmmercial Bank are associated (or correlated) with Binh Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Thanh Import has no effect on the direction of Vietnam JSCmmercial i.e., Vietnam JSCmmercial and Binh Thanh go up and down completely randomly.
Pair Corralation between Vietnam JSCmmercial and Binh Thanh
Assuming the 90 days trading horizon Vietnam JSCmmercial Bank is expected to generate 0.25 times more return on investment than Binh Thanh. However, Vietnam JSCmmercial Bank is 4.01 times less risky than Binh Thanh. It trades about 0.01 of its potential returns per unit of risk. Binh Thanh Import is currently generating about -0.1 per unit of risk. If you would invest 3,600,000 in Vietnam JSCmmercial Bank on September 20, 2024 and sell it today you would earn a total of 20,000 from holding Vietnam JSCmmercial Bank or generate 0.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Vietnam JSCmmercial Bank vs. Binh Thanh Import
Performance |
Timeline |
Vietnam JSCmmercial Bank |
Binh Thanh Import |
Vietnam JSCmmercial and Binh Thanh Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vietnam JSCmmercial and Binh Thanh
The main advantage of trading using opposite Vietnam JSCmmercial and Binh Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam JSCmmercial position performs unexpectedly, Binh 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 Binh Thanh will offset losses from the drop in Binh Thanh's long position.Vietnam JSCmmercial vs. FIT INVEST JSC | Vietnam JSCmmercial vs. Damsan JSC | Vietnam JSCmmercial vs. An Phat Plastic | Vietnam JSCmmercial vs. Alphanam ME |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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