Correlation Between Basic Materials and HNX 30
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By analyzing existing cross correlation between Basic Materials and HNX 30, you can compare the effects of market volatilities on Basic Materials and HNX 30 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 Basic Materials with a short position of HNX 30. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Materials and HNX 30.
Diversification Opportunities for Basic Materials and HNX 30
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Basic and HNX is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Basic Materials and HNX 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNX 30 and Basic Materials 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 Basic Materials are associated (or correlated) with HNX 30. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNX 30 has no effect on the direction of Basic Materials i.e., Basic Materials and HNX 30 go up and down completely randomly.
Pair Corralation between Basic Materials and HNX 30
Assuming the 90 days trading horizon Basic Materials is expected to generate 0.51 times more return on investment than HNX 30. However, Basic Materials is 1.95 times less risky than HNX 30. It trades about -0.07 of its potential returns per unit of risk. HNX 30 is currently generating about -0.06 per unit of risk. If you would invest 588,256 in Basic Materials on February 1, 2024 and sell it today you would lose (17,850) from holding Basic Materials or give up 3.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 97.56% |
Values | Daily Returns |
Basic Materials vs. HNX 30
Performance |
Timeline |
Basic Materials and HNX 30 Volatility Contrast
Predicted Return Density |
Returns |
Basic Materials
Pair trading matchups for Basic Materials
HNX 30
Pair trading matchups for HNX 30
Pair Trading with Basic Materials and HNX 30
The main advantage of trading using opposite Basic Materials and HNX 30 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Materials position performs unexpectedly, HNX 30 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 HNX 30 will offset losses from the drop in HNX 30's long position.Basic Materials vs. MAHLE Metal Leve | Basic Materials vs. NXP Semiconductors NV | Basic Materials vs. Align Technology | Basic Materials vs. Metalfrio Solutions SA |
HNX 30 vs. 577 Investment Corp | HNX 30 vs. Din Capital Investment | HNX 30 vs. FPT Digital Retail | HNX 30 vs. Dong A Plastic |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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