Correlation Between MST Investment and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both MST Investment 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 MST Investment and Binhthuan Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MST Investment JSC and Binhthuan Agriculture Services, you can compare the effects of market volatilities on MST Investment 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 MST Investment with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of MST Investment and Binhthuan Agriculture.
Diversification Opportunities for MST Investment and Binhthuan Agriculture
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MST and Binhthuan is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding MST Investment JSC and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and MST Investment 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 MST Investment JSC 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 MST Investment i.e., MST Investment and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between MST Investment and Binhthuan Agriculture
Assuming the 90 days trading horizon MST Investment JSC is expected to generate 2.73 times more return on investment than Binhthuan Agriculture. However, MST Investment is 2.73 times more volatile than Binhthuan Agriculture Services. It trades about 0.1 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about 0.2 per unit of risk. If you would invest 560,000 in MST Investment JSC on August 27, 2024 and sell it today you would earn a total of 30,000 from holding MST Investment JSC or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MST Investment JSC vs. Binhthuan Agriculture Services
Performance |
| Timeline |
| MST Investment JSC |
| Binhthuan Agriculture |
MST Investment and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MST Investment and Binhthuan Agriculture
The main advantage of trading using opposite MST Investment and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MST Investment 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.| MST Investment vs. FIT INVEST JSC | MST Investment vs. Damsan JSC | MST Investment vs. An Phat Plastic | MST Investment vs. APG Securities Joint |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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