Correlation Between SCG Construction and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both SCG Construction 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 SCG Construction and Binhthuan Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG Construction JSC and Binhthuan Agriculture Services, you can compare the effects of market volatilities on SCG Construction 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 SCG Construction with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Construction and Binhthuan Agriculture.
Diversification Opportunities for SCG Construction and Binhthuan Agriculture
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCG and Binhthuan is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SCG Construction 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 SCG Construction 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 SCG Construction 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 SCG Construction i.e., SCG Construction and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between SCG Construction and Binhthuan Agriculture
Assuming the 90 days trading horizon SCG Construction is expected to generate 4.93 times less return on investment than Binhthuan Agriculture. But when comparing it to its historical volatility, SCG Construction JSC is 2.67 times less risky than Binhthuan Agriculture. It trades about 0.1 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 378,000 in Binhthuan Agriculture Services on August 30, 2024 and sell it today you would earn a total of 15,000 from holding Binhthuan Agriculture Services or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SCG Construction JSC vs. Binhthuan Agriculture Services
Performance |
| Timeline |
| SCG Construction JSC |
| Binhthuan Agriculture |
SCG Construction and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG Construction and Binhthuan Agriculture
The main advantage of trading using opposite SCG Construction and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Construction 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.| SCG Construction vs. FIT INVEST JSC | SCG Construction vs. Damsan JSC | SCG Construction vs. An Phat Plastic | SCG Construction vs. Alphanam ME |
| Binhthuan Agriculture vs. FIT INVEST JSC | Binhthuan Agriculture vs. Damsan JSC | Binhthuan Agriculture vs. An Phat Plastic | Binhthuan Agriculture 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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