Correlation Between PV2 Investment and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both PV2 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 PV2 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 PV2 Investment JSC and Binhthuan Agriculture Services, you can compare the effects of market volatilities on PV2 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 PV2 Investment with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of PV2 Investment and Binhthuan Agriculture.
Diversification Opportunities for PV2 Investment and Binhthuan Agriculture
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PV2 and Binhthuan is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PV2 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 PV2 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 PV2 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 PV2 Investment i.e., PV2 Investment and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between PV2 Investment and Binhthuan Agriculture
Assuming the 90 days trading horizon PV2 Investment JSC is expected to generate 2.07 times more return on investment than Binhthuan Agriculture. However, PV2 Investment is 2.07 times more volatile than Binhthuan Agriculture Services. It trades about -0.02 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about -0.13 per unit of risk. If you would invest 300,000 in PV2 Investment JSC on September 3, 2024 and sell it today you would lose (50,000) from holding PV2 Investment JSC or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
PV2 Investment JSC vs. Binhthuan Agriculture Services
Performance |
| Timeline |
| PV2 Investment JSC |
| Binhthuan Agriculture |
PV2 Investment and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PV2 Investment and Binhthuan Agriculture
The main advantage of trading using opposite PV2 Investment and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PV2 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.| PV2 Investment vs. FIT INVEST JSC | PV2 Investment vs. Damsan JSC | PV2 Investment vs. An Phat Plastic | PV2 Investment vs. Alphanam ME |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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