Correlation Between Binhthuan Agriculture and Construction JSC
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Construction JSC 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 Construction JSC 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 Construction JSC No5, you can compare the effects of market volatilities on Binhthuan Agriculture and Construction JSC 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 Construction JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Construction JSC.
Diversification Opportunities for Binhthuan Agriculture and Construction JSC
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binhthuan and Construction is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Construction JSC No5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construction JSC No5 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 Construction JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construction JSC No5 has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Construction JSC go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Construction JSC
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to generate 0.19 times more return on investment than Construction JSC. However, Binhthuan Agriculture Services is 5.19 times less risky than Construction JSC. It trades about 0.2 of its potential returns per unit of risk. Construction JSC No5 is currently generating about -0.03 per unit of risk. If you would invest 379,000 in Binhthuan Agriculture Services on August 31, 2024 and sell it today you would earn a total of 16,000 from holding Binhthuan Agriculture Services or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Construction JSC No5
Performance |
| Timeline |
| Binhthuan Agriculture |
| Construction JSC No5 |
Binhthuan Agriculture and Construction JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Construction JSC
The main advantage of trading using opposite Binhthuan Agriculture and Construction JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Construction JSC 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 Construction JSC will offset losses from the drop in Construction JSC'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 |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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