Correlation Between Binhthuan Agriculture and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Asia Pacific 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 Asia Pacific 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 Asia Pacific Investment, you can compare the effects of market volatilities on Binhthuan Agriculture and Asia Pacific 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 Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Asia Pacific.
Diversification Opportunities for Binhthuan Agriculture and Asia Pacific
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binhthuan and Asia is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Asia Pacific Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investment 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 Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Investment has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Asia Pacific go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Asia Pacific
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to generate 0.62 times more return on investment than Asia Pacific. However, Binhthuan Agriculture Services is 1.62 times less risky than Asia Pacific. It trades about 0.27 of its potential returns per unit of risk. Asia Pacific Investment is currently generating about -0.16 per unit of risk. If you would invest 360,000 in Binhthuan Agriculture Services on August 26, 2024 and sell it today you would earn a total of 25,000 from holding Binhthuan Agriculture Services or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Asia Pacific Investment
Performance |
| Timeline |
| Binhthuan Agriculture |
| Asia Pacific Investment |
Binhthuan Agriculture and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Asia Pacific
The main advantage of trading using opposite Binhthuan Agriculture and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific's long position.| Binhthuan Agriculture vs. FIT INVEST JSC | Binhthuan Agriculture vs. Damsan JSC | Binhthuan Agriculture vs. An Phat Plastic | Binhthuan Agriculture vs. APG Securities Joint |
| Asia Pacific vs. FIT INVEST JSC | Asia Pacific vs. Damsan JSC | Asia Pacific vs. An Phat Plastic | Asia Pacific vs. APG Securities Joint |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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