Correlation Between Binh Duong and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both Binh Duong and Binhthuan Agriculture 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 Binh Duong and Binhthuan Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Duong Construction and Binhthuan Agriculture Services, you can compare the effects of market volatilities on Binh Duong and Binhthuan Agriculture 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 Binh Duong with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Binhthuan Agriculture.
Diversification Opportunities for Binh Duong and Binhthuan Agriculture
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binh and Binhthuan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Construction and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and Binh Duong 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 Binh Duong Construction are associated (or correlated) with Binhthuan Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binhthuan Agriculture has no effect on the direction of Binh Duong i.e., Binh Duong and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between Binh Duong and Binhthuan Agriculture
Assuming the 90 days trading horizon Binh Duong Construction is expected to generate 1.61 times more return on investment than Binhthuan Agriculture. However, Binh Duong is 1.61 times more volatile than Binhthuan Agriculture Services. It trades about 0.45 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about 0.16 per unit of risk. If you would invest 594,000 in Binh Duong Construction on September 2, 2024 and sell it today you would earn a total of 99,000 from holding Binh Duong Construction or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Duong Construction vs. Binhthuan Agriculture Services
Performance |
| Timeline |
| Binh Duong Construction |
| Binhthuan Agriculture |
Binh Duong and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Binhthuan Agriculture
The main advantage of trading using opposite Binh Duong and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong position performs unexpectedly, Binhthuan Agriculture 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 Binhthuan Agriculture will offset losses from the drop in Binhthuan Agriculture's long position.| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong vs. Alphanam ME |
| Binhthuan Agriculture vs. Ba Ria Thermal | Binhthuan Agriculture vs. Vietnam Dairy Products | Binhthuan Agriculture vs. Hochiminh City Metal | Binhthuan Agriculture vs. Investment and Industrial |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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