Correlation Between Techno Agricultural and Vina2 Investment
Can any of the company-specific risk be diversified away by investing in both Techno Agricultural and Vina2 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 Techno Agricultural and Vina2 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techno Agricultural Supplying and Vina2 Investment and, you can compare the effects of market volatilities on Techno Agricultural and Vina2 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 Techno Agricultural with a short position of Vina2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techno Agricultural and Vina2 Investment.
Diversification Opportunities for Techno Agricultural and Vina2 Investment
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Techno and Vina2 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Techno Agricultural Supplying and Vina2 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina2 Investment and Techno Agricultural 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 Techno Agricultural Supplying are associated (or correlated) with Vina2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina2 Investment has no effect on the direction of Techno Agricultural i.e., Techno Agricultural and Vina2 Investment go up and down completely randomly.
Pair Corralation between Techno Agricultural and Vina2 Investment
Assuming the 90 days trading horizon Techno Agricultural Supplying is expected to under-perform the Vina2 Investment. But the stock apears to be less risky and, when comparing its historical volatility, Techno Agricultural Supplying is 1.35 times less risky than Vina2 Investment. The stock trades about -0.03 of its potential returns per unit of risk. The Vina2 Investment and is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 850,000 in Vina2 Investment and on October 16, 2024 and sell it today you would earn a total of 60,000 from holding Vina2 Investment and or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techno Agricultural Supplying vs. Vina2 Investment and
Performance |
| Timeline |
| Techno Agricultural |
| Vina2 Investment |
Techno Agricultural and Vina2 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techno Agricultural and Vina2 Investment
The main advantage of trading using opposite Techno Agricultural and Vina2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techno Agricultural position performs unexpectedly, Vina2 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 Vina2 Investment will offset losses from the drop in Vina2 Investment's long position.| Techno Agricultural vs. Danang Rubber JSC | Techno Agricultural vs. Development Investment Construction | Techno Agricultural vs. Thu Duc TradingImport | Techno Agricultural vs. Tay Ninh Rubber |
| Vina2 Investment vs. Danang Rubber JSC | Vina2 Investment vs. PetroVietnam Transportation Corp | Vina2 Investment vs. Transport and Industry | Vina2 Investment vs. Techno Agricultural Supplying |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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