Correlation Between Dinhvu Port and Ben Thanh

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

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

Diversification Opportunities for Dinhvu Port and Ben Thanh

0.76

Correlation Coefficient

Dinhvu Port  Ben Thanh

Poor diversification

The 3 months correlation between Dinhvu and Ben is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dinhvu Port Investment 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 Dinhvu Port 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 Dinhvu Port Investment 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 Dinhvu Port i.e., Dinhvu Port and Ben Thanh go up and down completely randomly.

Pair Corralation between Dinhvu Port and Ben Thanh

Assuming the 90 days trading horizon Dinhvu Port Investment is expected to generate 1.13 times more return on investment than Ben Thanh. However, Dinhvu Port is 1.13 times more volatile than Ben Thanh Rubber. It trades about 0.13 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.15 per unit of risk. If you would invest  8,100,000  in Dinhvu Port Investment on October 10, 2024 and sell it today you would earn a total of  240,000  from holding Dinhvu Port Investment or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Dinhvu Port Investment  vs.  Ben Thanh Rubber

Dinhvu Port Investment

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dinhvu Port Investment are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dinhvu Port may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ben Thanh Rubber

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ben Thanh Rubber are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Ben Thanh displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dinhvu Port and Ben Thanh

The main advantage of trading using opposite Dinhvu Port and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dinhvu Port 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 Dinhvu Port Investment 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.