Correlation Between Binhthuan Agriculture and Bentre Aquaproduct
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Bentre Aquaproduct 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 Binhthuan Agriculture and Bentre Aquaproduct into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binhthuan Agriculture Services and Bentre Aquaproduct Import, you can compare the effects of market volatilities on Binhthuan Agriculture and Bentre Aquaproduct 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 Binhthuan Agriculture with a short position of Bentre Aquaproduct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Bentre Aquaproduct.
Diversification Opportunities for Binhthuan Agriculture and Bentre Aquaproduct
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binhthuan and Bentre is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Bentre Aquaproduct Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bentre Aquaproduct Import and Binhthuan Agriculture 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 Binhthuan Agriculture Services are associated (or correlated) with Bentre Aquaproduct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bentre Aquaproduct Import has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Bentre Aquaproduct go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Bentre Aquaproduct
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to generate 1.67 times more return on investment than Bentre Aquaproduct. However, Binhthuan Agriculture is 1.67 times more volatile than Bentre Aquaproduct Import. It trades about 0.27 of its potential returns per unit of risk. Bentre Aquaproduct Import is currently generating about 0.06 per unit of risk. If you would invest 368,000 in Binhthuan Agriculture Services on August 27, 2024 and sell it today you would earn a total of 24,000 from holding Binhthuan Agriculture Services or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Bentre Aquaproduct Import
Performance |
| Timeline |
| Binhthuan Agriculture |
| Bentre Aquaproduct Import |
Binhthuan Agriculture and Bentre Aquaproduct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Bentre Aquaproduct
The main advantage of trading using opposite Binhthuan Agriculture and Bentre Aquaproduct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Bentre Aquaproduct 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 Bentre Aquaproduct will offset losses from the drop in Bentre Aquaproduct's long position.The idea behind Binhthuan Agriculture Services and Bentre Aquaproduct Import 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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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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