Correlation Between Binh Duong and Development Investment
Can any of the company-specific risk be diversified away by investing in both Binh Duong and Development Investment 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 Binh Duong and Development Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Duong Trade and Development Investment Construction, you can compare the effects of market volatilities on Binh Duong and Development Investment 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 Binh Duong with a short position of Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Development Investment.
Diversification Opportunities for Binh Duong and Development Investment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binh and Development is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Trade and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment and Binh Duong 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 Binh Duong Trade are associated (or correlated) with Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Binh Duong i.e., Binh Duong and Development Investment go up and down completely randomly.
Pair Corralation between Binh Duong and Development Investment
Assuming the 90 days trading horizon Binh Duong Trade is expected to generate 0.85 times more return on investment than Development Investment. However, Binh Duong Trade is 1.17 times less risky than Development Investment. It trades about 0.07 of its potential returns per unit of risk. Development Investment Construction is currently generating about 0.01 per unit of risk. If you would invest 825,000 in Binh Duong Trade on September 3, 2024 and sell it today you would earn a total of 195,000 from holding Binh Duong Trade or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.23% |
| Values | Daily Returns |
Binh Duong Trade vs. Development Investment Constru
Performance |
| Timeline |
| Binh Duong Trade |
| Development Investment |
Binh Duong and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Development Investment
The main advantage of trading using opposite Binh Duong and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong position performs unexpectedly, Development Investment 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 Development Investment will offset losses from the drop in Development Investment's long position.| Binh Duong vs. Development Investment Construction | Binh Duong vs. Ba Ria Thermal | Binh Duong vs. Viet Thanh Plastic | Binh Duong vs. Hanoi Plastics JSC |
| Development Investment vs. FIT INVEST JSC | Development Investment vs. Damsan JSC | Development Investment vs. An Phat Plastic | Development 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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