Correlation Between Binhthuan Agriculture and An Phat
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and An Phat 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 An Phat 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 An Phat Holdings, you can compare the effects of market volatilities on Binhthuan Agriculture and An Phat 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 An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and An Phat.
Diversification Opportunities for Binhthuan Agriculture and An Phat
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binhthuan and APH is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and An Phat Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Phat Holdings 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 An Phat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Phat Holdings has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and An Phat go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and An Phat
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to under-perform the An Phat. But the stock apears to be less risky and, when comparing its historical volatility, Binhthuan Agriculture Services is 1.0 times less risky than An Phat. The stock trades about -0.02 of its potential returns per unit of risk. The An Phat Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 744,000 in An Phat Holdings on October 17, 2024 and sell it today you would lose (39,000) from holding An Phat Holdings or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. An Phat Holdings
Performance |
| Timeline |
| Binhthuan Agriculture |
| An Phat Holdings |
Binhthuan Agriculture and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and An Phat
The main advantage of trading using opposite Binhthuan Agriculture and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, An Phat 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 An Phat will offset losses from the drop in An Phat's long position.| Binhthuan Agriculture vs. Tri Viet Management | Binhthuan Agriculture vs. Riverway Management JSC | Binhthuan Agriculture vs. CEO Group JSC | Binhthuan Agriculture vs. MST Investment JSC |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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