Correlation Between DOMESCO Medical and Binh Duong
Can any of the company-specific risk be diversified away by investing in both DOMESCO Medical 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 DOMESCO Medical and Binh Duong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DOMESCO Medical Import and Binh Duong Construction, you can compare the effects of market volatilities on DOMESCO Medical 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 DOMESCO Medical with a short position of Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOMESCO Medical and Binh Duong.
Diversification Opportunities for DOMESCO Medical and Binh Duong
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DOMESCO and Binh is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding DOMESCO Medical Import and Binh Duong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Construction and DOMESCO Medical 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 DOMESCO Medical Import 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 Construction has no effect on the direction of DOMESCO Medical i.e., DOMESCO Medical and Binh Duong go up and down completely randomly.
Pair Corralation between DOMESCO Medical and Binh Duong
Assuming the 90 days trading horizon DOMESCO Medical is expected to generate 2.16 times less return on investment than Binh Duong. In addition to that, DOMESCO Medical is 1.23 times more volatile than Binh Duong Construction. It trades about 0.03 of its total potential returns per unit of risk. Binh Duong Construction is currently generating about 0.08 per unit of volatility. If you would invest 656,000 in Binh Duong Construction on December 2, 2024 and sell it today you would earn a total of 344,000 from holding Binh Duong Construction or generate 52.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 87.5% |
| Values | Daily Returns |
DOMESCO Medical Import vs. Binh Duong Construction
Performance |
| Timeline |
| DOMESCO Medical Import |
| Binh Duong Construction |
DOMESCO Medical and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DOMESCO Medical and Binh Duong
The main advantage of trading using opposite DOMESCO Medical and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOMESCO Medical 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.| DOMESCO Medical vs. PetroVietnam Transportation Corp | DOMESCO Medical vs. PVI Reinsurance Corp | DOMESCO Medical vs. Century Synthetic Fiber | DOMESCO Medical vs. Innovative Technology Development |
| Binh Duong vs. Vietnam JSCmmercial Bank | Binh Duong vs. HVC Investment and | Binh Duong vs. PostTelecommunication Equipment | Binh Duong vs. VietinBank Securities JSC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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