Correlation Between Ba Ria and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Ba Ria and Binh Duong 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 Ba Ria and Binh Duong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ba Ria Thermal and Binh Duong Trade, you can compare the effects of market volatilities on Ba Ria and Binh Duong 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 Ba Ria with a short position of Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ba Ria and Binh Duong.
Diversification Opportunities for Ba Ria and Binh Duong
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between BTP and Binh is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal and Binh Duong Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Trade and Ba Ria 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 Ba Ria Thermal are associated (or correlated) with Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Trade has no effect on the direction of Ba Ria i.e., Ba Ria and Binh Duong go up and down completely randomly.
Pair Corralation between Ba Ria and Binh Duong
Assuming the 90 days trading horizon Ba Ria Thermal is expected to generate 0.68 times more return on investment than Binh Duong. However, Ba Ria Thermal is 1.48 times less risky than Binh Duong. It trades about -0.01 of its potential returns per unit of risk. Binh Duong Trade is currently generating about -0.02 per unit of risk. If you would invest 1,269,170 in Ba Ria Thermal on September 4, 2024 and sell it today you would lose (134,170) from holding Ba Ria Thermal or give up 10.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Ba Ria Thermal vs. Binh Duong Trade
Performance |
| Timeline |
| Ba Ria Thermal |
| Binh Duong Trade |
Ba Ria and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ba Ria and Binh Duong
The main advantage of trading using opposite Ba Ria and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ba Ria position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.The idea behind Ba Ria Thermal and Binh Duong Trade pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong vs. Alphanam ME |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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