Correlation Between EVN Finance and Ben Thanh

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

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

Diversification Opportunities for EVN Finance and Ben Thanh

-0.82

Correlation Coefficient

EVN Finance  Ben Thanh

Pay attention - limited upside

The 3 months correlation between EVN and Ben is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding EVN Finance JSC 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 EVN Finance 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 EVN Finance JSC 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 EVN Finance i.e., EVN Finance and Ben Thanh go up and down completely randomly.

Pair Corralation between EVN Finance and Ben Thanh

Assuming the 90 days trading horizon EVN Finance is expected to generate 1.83 times less return on investment than Ben Thanh. In addition to that, EVN Finance is 1.25 times more volatile than Ben Thanh Rubber. It trades about 0.03 of its total potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.07 per unit of volatility. If you would invest  776,921  in Ben Thanh Rubber on October 26, 2024 and sell it today you would earn a total of  653,079  from holding Ben Thanh Rubber or generate 84.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	94.97%
Values	Daily Returns

EVN Finance JSC  vs.  Ben Thanh Rubber

EVN Finance JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVN Finance JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ben Thanh Rubber

Risk-Adjusted Performance

8 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ben Thanh Rubber are ranked lower than 8 (%) 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 EVN Finance and Ben Thanh

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

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..