Correlation Between Binhthuan Agriculture and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Tin Nghia 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 Tin Nghia 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 Tin Nghia Industrial, you can compare the effects of market volatilities on Binhthuan Agriculture and Tin Nghia 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 Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Tin Nghia.
Diversification Opportunities for Binhthuan Agriculture and Tin Nghia
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binhthuan and Tin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial 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 Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Tin Nghia go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Tin Nghia
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to generate 0.58 times more return on investment than Tin Nghia. However, Binhthuan Agriculture Services is 1.73 times less risky than Tin Nghia. It trades about 0.2 of its potential returns per unit of risk. Tin Nghia Industrial is currently generating about -0.02 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Tin Nghia Industrial
Performance |
| Timeline |
| Binhthuan Agriculture |
| Tin Nghia Industrial |
Binhthuan Agriculture and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Tin Nghia
The main advantage of trading using opposite Binhthuan Agriculture and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia'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 |
| Tin Nghia vs. FIT INVEST JSC | Tin Nghia vs. Damsan JSC | Tin Nghia vs. An Phat Plastic | Tin Nghia vs. Alphanam ME |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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