Correlation Between Binhthuan Agriculture and Viettel Construction
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Viettel Construction 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 Viettel Construction 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 Viettel Construction JSC, you can compare the effects of market volatilities on Binhthuan Agriculture and Viettel Construction 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 Viettel Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Viettel Construction.
Diversification Opportunities for Binhthuan Agriculture and Viettel Construction
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Binhthuan and Viettel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Viettel Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viettel Construction JSC 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 Viettel Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viettel Construction JSC has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Viettel Construction go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Viettel Construction
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to generate 0.38 times more return on investment than Viettel Construction. However, Binhthuan Agriculture Services is 2.66 times less risky than Viettel Construction. It trades about 0.18 of its potential returns per unit of risk. Viettel Construction JSC is currently generating about -0.18 per unit of risk. If you would invest 378,000 in Binhthuan Agriculture Services on August 30, 2024 and sell it today you would earn a total of 15,000 from holding Binhthuan Agriculture Services or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Viettel Construction JSC
Performance |
| Timeline |
| Binhthuan Agriculture |
| Viettel Construction JSC |
Binhthuan Agriculture and Viettel Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Viettel Construction
The main advantage of trading using opposite Binhthuan Agriculture and Viettel Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Viettel Construction 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 Viettel Construction will offset losses from the drop in Viettel Construction's long position.| Binhthuan Agriculture vs. FIT INVEST JSC | Binhthuan Agriculture vs. Damsan JSC | Binhthuan Agriculture vs. An Phat Plastic | Binhthuan Agriculture vs. Alphanam ME |
| Viettel Construction vs. Sea Air Freight | Viettel Construction vs. DOMESCO Medical Import | Viettel Construction vs. Military Insurance Corp | Viettel Construction vs. Japan Vietnam Medical |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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