Correlation Between Binhthuan Agriculture and Saigon Machinery
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Saigon Machinery 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 Saigon Machinery 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 Saigon Machinery Spare, you can compare the effects of market volatilities on Binhthuan Agriculture and Saigon Machinery 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 Saigon Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Saigon Machinery.
Diversification Opportunities for Binhthuan Agriculture and Saigon Machinery
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Binhthuan and Saigon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Saigon Machinery Spare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Machinery Spare 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 Saigon Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Machinery Spare has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Saigon Machinery go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Saigon Machinery
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to under-perform the Saigon Machinery. In addition to that, Binhthuan Agriculture is 2.55 times more volatile than Saigon Machinery Spare. It trades about -0.02 of its total potential returns per unit of risk. Saigon Machinery Spare is currently generating about 0.45 per unit of volatility. If you would invest 1,570,000 in Saigon Machinery Spare on November 7, 2024 and sell it today you would earn a total of 30,000 from holding Saigon Machinery Spare or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.78% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Saigon Machinery Spare
Performance |
| Timeline |
| Binhthuan Agriculture |
| Saigon Machinery Spare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Excellent
Binhthuan Agriculture and Saigon Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Saigon Machinery
The main advantage of trading using opposite Binhthuan Agriculture and Saigon Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Saigon Machinery 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 Saigon Machinery will offset losses from the drop in Saigon Machinery'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 |
| Saigon Machinery vs. Transport and Industry | Saigon Machinery vs. Innovative Technology Development | Saigon Machinery vs. Vietnam JSCmmercial Bank | Saigon Machinery vs. Elcom Technology Communications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |