Correlation Between Binh Duong and Construction JSC
Can any of the company-specific risk be diversified away by investing in both Binh Duong and Construction JSC 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 Construction JSC 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 Construction JSC No5, you can compare the effects of market volatilities on Binh Duong and Construction JSC 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 Construction JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Construction JSC.
Diversification Opportunities for Binh Duong and Construction JSC
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binh and Construction is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Construction and Construction JSC No5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construction JSC No5 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 Construction JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construction JSC No5 has no effect on the direction of Binh Duong i.e., Binh Duong and Construction JSC go up and down completely randomly.
Pair Corralation between Binh Duong and Construction JSC
Assuming the 90 days trading horizon Binh Duong Construction is expected to generate 0.31 times more return on investment than Construction JSC. However, Binh Duong Construction is 3.22 times less risky than Construction JSC. It trades about 0.55 of its potential returns per unit of risk. Construction JSC No5 is currently generating about 0.03 per unit of risk. If you would invest 564,000 in Binh Duong Construction on August 28, 2024 and sell it today you would earn a total of 116,000 from holding Binh Duong Construction or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Binh Duong Construction vs. Construction JSC No5
Performance |
| Timeline |
| Binh Duong Construction |
| Construction JSC No5 |
Binh Duong and Construction JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Construction JSC
The main advantage of trading using opposite Binh Duong and Construction JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong position performs unexpectedly, Construction JSC 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 Construction JSC will offset losses from the drop in Construction JSC's long position.| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong vs. APG Securities Joint |
| Construction JSC vs. FIT INVEST JSC | Construction JSC vs. Damsan JSC | Construction JSC vs. An Phat Plastic | Construction JSC 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |