Correlation Between Binhthuan Agriculture and Vina2 Investment
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Vina2 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 Vina2 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 Vina2 Investment and, you can compare the effects of market volatilities on Binhthuan Agriculture and Vina2 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 Vina2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Vina2 Investment.
Diversification Opportunities for Binhthuan Agriculture and Vina2 Investment
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Binhthuan and Vina2 is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Vina2 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina2 Investment 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 Vina2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina2 Investment has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Vina2 Investment go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Vina2 Investment
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to under-perform the Vina2 Investment. But the stock apears to be less risky and, when comparing its historical volatility, Binhthuan Agriculture Services is 1.5 times less risky than Vina2 Investment. The stock trades about -0.04 of its potential returns per unit of risk. The Vina2 Investment and is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,030,000 in Vina2 Investment and on August 26, 2024 and sell it today you would lose (150,000) from holding Vina2 Investment and or give up 14.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Vina2 Investment and
Performance |
| Timeline |
| Binhthuan Agriculture |
| Vina2 Investment |
Binhthuan Agriculture and Vina2 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Vina2 Investment
The main advantage of trading using opposite Binhthuan Agriculture and Vina2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Vina2 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 Vina2 Investment will offset losses from the drop in Vina2 Investment'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 |
| Vina2 Investment vs. FIT INVEST JSC | Vina2 Investment vs. Damsan JSC | Vina2 Investment vs. An Phat Plastic | Vina2 Investment vs. APG Securities Joint |
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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