Correlation Between Tay Ninh and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both Tay Ninh 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 Tay Ninh and Binhthuan Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tay Ninh Rubber and Binhthuan Agriculture Services, you can compare the effects of market volatilities on Tay Ninh 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 Tay Ninh with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and Binhthuan Agriculture.
Diversification Opportunities for Tay Ninh and Binhthuan Agriculture
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tay and Binhthuan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and Tay Ninh 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 Tay Ninh Rubber 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 Tay Ninh i.e., Tay Ninh and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between Tay Ninh and Binhthuan Agriculture
Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 0.97 times more return on investment than Binhthuan Agriculture. However, Tay Ninh Rubber is 1.03 times less risky than Binhthuan Agriculture. It trades about 0.09 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about -0.07 per unit of risk. If you would invest 2,883,625 in Tay Ninh Rubber on August 28, 2024 and sell it today you would earn a total of 1,796,375 from holding Tay Ninh Rubber or generate 62.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.17% |
| Values | Daily Returns |
Tay Ninh Rubber vs. Binhthuan Agriculture Services
Performance |
| Timeline |
| Tay Ninh Rubber |
| Binhthuan Agriculture |
Tay Ninh and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tay Ninh and Binhthuan Agriculture
The main advantage of trading using opposite Tay Ninh and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tay Ninh 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.| Tay Ninh vs. Dong Nai Plastic | Tay Ninh vs. Saigon Beer Alcohol | Tay Ninh vs. Hanoi Plastics JSC | Tay Ninh vs. BIDV Insurance Corp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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