Correlation Between Innovative Technology and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Innovative Technology 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 Innovative Technology and Binh Duong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Technology Development and Binh Duong Trade, you can compare the effects of market volatilities on Innovative Technology 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 Innovative Technology with a short position of Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Technology and Binh Duong.
Diversification Opportunities for Innovative Technology and Binh Duong
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innovative and Binh is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Technology Developm 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 Innovative Technology 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 Innovative Technology Development 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 Innovative Technology i.e., Innovative Technology and Binh Duong go up and down completely randomly.
Pair Corralation between Innovative Technology and Binh Duong
Assuming the 90 days trading horizon Innovative Technology Development is expected to under-perform the Binh Duong. In addition to that, Innovative Technology is 1.08 times more volatile than Binh Duong Trade. It trades about -0.14 of its total potential returns per unit of risk. Binh Duong Trade is currently generating about 0.35 per unit of volatility. If you would invest 995,000 in Binh Duong Trade on September 15, 2024 and sell it today you would earn a total of 125,000 from holding Binh Duong Trade or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Technology Developm vs. Binh Duong Trade
Performance |
| Timeline |
| Innovative Technology |
| Binh Duong Trade |
Innovative Technology and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Technology and Binh Duong
The main advantage of trading using opposite Innovative Technology and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Technology 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.| Innovative Technology vs. Dong A Hotel | Innovative Technology vs. Transport and Industry | Innovative Technology vs. Song Hong Aluminum | Innovative Technology vs. Danang Education Investment |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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