Correlation Between Bich Chi and South Books
Can any of the company-specific risk be diversified away by investing in both Bich Chi and South Books 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 Bich Chi and South Books into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bich Chi Food and South Books Educational, you can compare the effects of market volatilities on Bich Chi and South Books 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 Bich Chi with a short position of South Books. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bich Chi and South Books.
Diversification Opportunities for Bich Chi and South Books
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bich and South is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bich Chi Food and South Books Educational in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Books Educational and Bich Chi 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 Bich Chi Food are associated (or correlated) with South Books. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Books Educational has no effect on the direction of Bich Chi i.e., Bich Chi and South Books go up and down completely randomly.
Pair Corralation between Bich Chi and South Books
Assuming the 90 days trading horizon Bich Chi Food is expected to generate 0.95 times more return on investment than South Books. However, Bich Chi Food is 1.06 times less risky than South Books. It trades about 0.15 of its potential returns per unit of risk. South Books Educational is currently generating about 0.03 per unit of risk. If you would invest 2,837,405 in Bich Chi Food on September 2, 2024 and sell it today you would earn a total of 1,162,595 from holding Bich Chi Food or generate 40.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 59.09% |
| Values | Daily Returns |
Bich Chi Food vs. South Books Educational
Performance |
| Timeline |
| Bich Chi Food |
| South Books Educational |
Bich Chi and South Books Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bich Chi and South Books
The main advantage of trading using opposite Bich Chi and South Books positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bich Chi position performs unexpectedly, South Books 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 South Books will offset losses from the drop in South Books' long position.| Bich Chi vs. Dong Nai Plastic | Bich Chi vs. Tay Ninh Rubber | Bich Chi vs. Vietnam Rubber Group | Bich Chi vs. Hung Hau Agricultural |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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