Correlation Between Binh Duong and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Binh Duong and Asia Pacific 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 Asia Pacific 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 Asia Pacific Investment, you can compare the effects of market volatilities on Binh Duong and Asia Pacific 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 Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Asia Pacific.
Diversification Opportunities for Binh Duong and Asia Pacific
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binh and Asia is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Construction and Asia Pacific Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investment 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 Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Investment has no effect on the direction of Binh Duong i.e., Binh Duong and Asia Pacific go up and down completely randomly.
Pair Corralation between Binh Duong and Asia Pacific
Assuming the 90 days trading horizon Binh Duong Construction is expected to generate 0.49 times more return on investment than Asia Pacific. However, Binh Duong Construction is 2.06 times less risky than Asia Pacific. It trades about 0.06 of its potential returns per unit of risk. Asia Pacific Investment is currently generating about 0.02 per unit of risk. If you would invest 718,000 in Binh Duong Construction on December 5, 2024 and sell it today you would earn a total of 307,000 from holding Binh Duong Construction or generate 42.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Duong Construction vs. Asia Pacific Investment
Performance |
| Timeline |
| Binh Duong Construction |
| Asia Pacific Investment |
Binh Duong and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Asia Pacific
The main advantage of trading using opposite Binh Duong and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific's long position.| Binh Duong vs. Song Hong Construction | ||
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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 Stocks Directory module to find actively traded stocks across global markets.
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