Correlation Between HNX 30 and Basic Materials
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By analyzing existing cross correlation between HNX 30 and Basic Materials, you can compare the effects of market volatilities on HNX 30 and Basic Materials 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 HNX 30 with a short position of Basic Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNX 30 and Basic Materials.
Diversification Opportunities for HNX 30 and Basic Materials
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HNX and Basic is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding HNX 30 and Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Materials and HNX 30 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 HNX 30 are associated (or correlated) with Basic Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Materials has no effect on the direction of HNX 30 i.e., HNX 30 and Basic Materials go up and down completely randomly.
Pair Corralation between HNX 30 and Basic Materials
Assuming the 90 days trading horizon HNX 30 is expected to under-perform the Basic Materials. In addition to that, HNX 30 is 2.36 times more volatile than Basic Materials. It trades about -0.13 of its total potential returns per unit of risk. Basic Materials is currently generating about -0.24 per unit of volatility. If you would invest 606,729 in Basic Materials on February 8, 2024 and sell it today you would lose (36,507) from holding Basic Materials or give up 6.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 77.27% |
Values | Daily Returns |
HNX 30 vs. Basic Materials
Performance |
Timeline |
HNX 30 and Basic Materials Volatility Contrast
Predicted Return Density |
Returns |
HNX 30
Pair trading matchups for HNX 30
Basic Materials
Pair trading matchups for Basic Materials
Pair Trading with HNX 30 and Basic Materials
The main advantage of trading using opposite HNX 30 and Basic Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNX 30 position performs unexpectedly, Basic Materials 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 Basic Materials will offset losses from the drop in Basic Materials' long position.HNX 30 vs. HUD1 Investment and | HNX 30 vs. RangDong Plastic JSC | HNX 30 vs. Phuoc Hoa Rubber | HNX 30 vs. Ben Thanh Rubber |
Basic Materials vs. Technos SA | Basic Materials vs. Palantir Technologies | Basic Materials vs. Metalurgica Gerdau SA | Basic Materials vs. Dell Technologies |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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