Correlation Between Vietnam Construction and Plastic Additives

Can any of the company-specific risk be diversified away by investing in both Vietnam Construction and Plastic Additives 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 Construction and Plastic Additives into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vietnam Construction JSC and Plastic Additives JSC, you can compare the effects of market volatilities on Vietnam Construction and Plastic Additives 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 Construction with a short position of Plastic Additives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Construction and Plastic Additives.

Diversification Opportunities for Vietnam Construction and Plastic Additives

-0.02

Correlation Coefficient

Vietnam Construction  Plastic Additives

Good diversification

The 3 months correlation between Vietnam and Plastic is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Construction JSC and Plastic Additives JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Additives JSC and Vietnam Construction 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 Construction JSC are associated (or correlated) with Plastic Additives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Additives JSC has no effect on the direction of Vietnam Construction i.e., Vietnam Construction and Plastic Additives go up and down completely randomly.

Pair Corralation between Vietnam Construction and Plastic Additives

Assuming the 90 days trading horizon Vietnam Construction JSC is expected to generate 0.33 times more return on investment than Plastic Additives. However, Vietnam Construction JSC is 3.06 times less risky than Plastic Additives. It trades about 0.14 of its potential returns per unit of risk. Plastic Additives JSC is currently generating about -0.02 per unit of risk. If you would invest  2,522,935  in Vietnam Construction JSC on May 7, 2025 and sell it today you would earn a total of  201,835  from holding Vietnam Construction JSC or generate 8.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vietnam Construction JSC  vs.  Plastic Additives JSC

Vietnam Construction JSC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vietnam Construction JSC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vietnam Construction may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Plastic Additives JSC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plastic Additives JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Plastic Additives is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vietnam Construction and Plastic Additives

The main advantage of trading using opposite Vietnam Construction and Plastic Additives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Construction position performs unexpectedly, Plastic Additives 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 Plastic Additives will offset losses from the drop in Plastic Additives' long position.

The idea behind Vietnam Construction JSC and Plastic Additives JSC 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.