Correlation Between Vietnam Rubber and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both Vietnam Rubber and Binhthuan Agriculture 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 Vietnam Rubber and Binhthuan Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Rubber Group and Binhthuan Agriculture Services, you can compare the effects of market volatilities on Vietnam Rubber and Binhthuan Agriculture 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 Vietnam Rubber with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Rubber and Binhthuan Agriculture.
Diversification Opportunities for Vietnam Rubber and Binhthuan Agriculture
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vietnam and Binhthuan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Rubber Group and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and Vietnam Rubber 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 Vietnam Rubber Group are associated (or correlated) with Binhthuan Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binhthuan Agriculture has no effect on the direction of Vietnam Rubber i.e., Vietnam Rubber and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between Vietnam Rubber and Binhthuan Agriculture
Assuming the 90 days trading horizon Vietnam Rubber Group is expected to generate 0.7 times more return on investment than Binhthuan Agriculture. However, Vietnam Rubber Group is 1.42 times less risky than Binhthuan Agriculture. It trades about 0.35 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about 0.02 per unit of risk. If you would invest 2,800,000 in Vietnam Rubber Group on December 11, 2024 and sell it today you would earn a total of 530,000 from holding Vietnam Rubber Group or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Rubber Group vs. Binhthuan Agriculture Services
Performance |
| Timeline |
| Vietnam Rubber Group |
| Binhthuan Agriculture |
Vietnam Rubber and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Rubber and Binhthuan Agriculture
The main advantage of trading using opposite Vietnam Rubber and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Rubber position performs unexpectedly, Binhthuan Agriculture 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 Binhthuan Agriculture will offset losses from the drop in Binhthuan Agriculture's long position.| Vietnam Rubber vs. Binh Duong Construction | Vietnam Rubber vs. Saigon Telecommunication Technologies | Vietnam Rubber vs. Vietnam Construction JSC | Vietnam Rubber vs. Petrolimex Insurance Corp |
| Binhthuan Agriculture vs. TDG Global Investment | Binhthuan Agriculture vs. Development Investment Construction | Binhthuan Agriculture vs. Viet Thanh Plastic | Binhthuan Agriculture vs. HVC Investment and |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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