Correlation Between Binhthuan Agriculture and Vietnam Construction
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Vietnam Construction 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 Vietnam Construction 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 Vietnam Construction JSC, you can compare the effects of market volatilities on Binhthuan Agriculture and Vietnam Construction 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 Vietnam Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Vietnam Construction.
Diversification Opportunities for Binhthuan Agriculture and Vietnam Construction
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binhthuan and Vietnam is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Vietnam Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Construction JSC 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 Vietnam Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Construction JSC has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Vietnam Construction go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Vietnam Construction
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to under-perform the Vietnam Construction. In addition to that, Binhthuan Agriculture is 1.53 times more volatile than Vietnam Construction JSC. It trades about -0.17 of its total potential returns per unit of risk. Vietnam Construction JSC is currently generating about 0.11 per unit of volatility. If you would invest 2,571,429 in Vietnam Construction JSC on August 30, 2024 and sell it today you would earn a total of 308,571 from holding Vietnam Construction JSC or generate 12.0% 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. Vietnam Construction JSC
Performance |
| Timeline |
| Binhthuan Agriculture |
| Vietnam Construction JSC |
Binhthuan Agriculture and Vietnam Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Vietnam Construction
The main advantage of trading using opposite Binhthuan Agriculture and Vietnam Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Vietnam Construction 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 Vietnam Construction will offset losses from the drop in Vietnam Construction'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 |
| Vietnam Construction vs. Danang Rubber JSC | Vietnam Construction vs. Tay Ninh Rubber | Vietnam Construction vs. Viet Thanh Plastic | Vietnam Construction vs. Vinhomes 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |