Correlation Between Din Capital and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both Din Capital 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 Din Capital and Binhthuan Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and Binhthuan Agriculture Services, you can compare the effects of market volatilities on Din Capital 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 Din Capital with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Binhthuan Agriculture.
Diversification Opportunities for Din Capital and Binhthuan Agriculture
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Din and Binhthuan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and Din Capital 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 Din Capital Investment 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 Din Capital i.e., Din Capital and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between Din Capital and Binhthuan Agriculture
Assuming the 90 days trading horizon Din Capital Investment is expected to generate 2.32 times more return on investment than Binhthuan Agriculture. However, Din Capital is 2.32 times more volatile than Binhthuan Agriculture Services. It trades about 0.23 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about 0.16 per unit of risk. If you would invest 920,000 in Din Capital Investment on September 2, 2024 and sell it today you would earn a total of 100,000 from holding Din Capital Investment or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Din Capital Investment vs. Binhthuan Agriculture Services
Performance |
| Timeline |
| Din Capital Investment |
| Binhthuan Agriculture |
Din Capital and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Din Capital and Binhthuan Agriculture
The main advantage of trading using opposite Din Capital and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital 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.| Din Capital vs. FIT INVEST JSC | Din Capital vs. Damsan JSC | Din Capital vs. An Phat Plastic | Din Capital vs. Alphanam ME |
| Binhthuan Agriculture vs. Ba Ria Thermal | Binhthuan Agriculture vs. Vietnam Dairy Products | Binhthuan Agriculture vs. Hochiminh City Metal | Binhthuan Agriculture vs. Investment and Industrial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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