Correlation Between Binhthuan Agriculture and MST Investment
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and MST Investment 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 MST Investment 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 MST Investment JSC, you can compare the effects of market volatilities on Binhthuan Agriculture and MST Investment 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 MST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and MST Investment.
Diversification Opportunities for Binhthuan Agriculture and MST Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binhthuan and MST is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and MST Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MST Investment 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 MST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MST Investment JSC has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and MST Investment go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and MST Investment
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to under-perform the MST Investment. But the stock apears to be less risky and, when comparing its historical volatility, Binhthuan Agriculture Services is 1.4 times less risky than MST Investment. The stock trades about -0.02 of its potential returns per unit of risk. The MST Investment JSC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 680,000 in MST Investment JSC on November 7, 2024 and sell it today you would earn a total of 40,000 from holding MST Investment JSC or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.89% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. MST Investment JSC
Performance |
| Timeline |
| Binhthuan Agriculture |
| MST Investment JSC |
Binhthuan Agriculture and MST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and MST Investment
The main advantage of trading using opposite Binhthuan Agriculture and MST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, MST Investment 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 MST Investment will offset losses from the drop in MST Investment's long position.| Binhthuan Agriculture vs. Transport and Industry | Binhthuan Agriculture vs. Elcom Technology Communications | Binhthuan Agriculture vs. HUD1 Investment and | Binhthuan Agriculture vs. Hai An Transport |
| MST Investment vs. HUD1 Investment and | MST Investment vs. Transport and Industry | MST Investment vs. Elcom Technology Communications | MST Investment vs. Binhthuan Agriculture Services |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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