Correlation Between Binhthuan Agriculture and Hung Hau
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Hung Hau 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 Hung Hau 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 Hung Hau Agricultural, you can compare the effects of market volatilities on Binhthuan Agriculture and Hung Hau 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 Hung Hau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Hung Hau.
Diversification Opportunities for Binhthuan Agriculture and Hung Hau
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binhthuan and Hung is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Hung Hau Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Hau Agricultural 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 Hung Hau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Hau Agricultural has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Hung Hau go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Hung Hau
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to under-perform the Hung Hau. But the stock apears to be less risky and, when comparing its historical volatility, Binhthuan Agriculture Services is 2.25 times less risky than Hung Hau. The stock trades about -0.04 of its potential returns per unit of risk. The Hung Hau Agricultural is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,316,111 in Hung Hau Agricultural on August 27, 2024 and sell it today you would lose (216,111) from holding Hung Hau Agricultural or give up 16.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 64.02% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Hung Hau Agricultural
Performance |
| Timeline |
| Binhthuan Agriculture |
| Hung Hau Agricultural |
Binhthuan Agriculture and Hung Hau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Hung Hau
The main advantage of trading using opposite Binhthuan Agriculture and Hung Hau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Hung Hau 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 Hung Hau will offset losses from the drop in Hung Hau'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 |
| Hung Hau vs. Saigon Viendong Technology | Hung Hau vs. Post and Telecommunications | Hung Hau vs. Foreign Trade Development | Hung Hau vs. VTC Telecommunications JSC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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