Correlation Between BooKook Steel and Vina Technology

Can any of the company-specific risk be diversified away by investing in both BooKook Steel and Vina Technology 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 BooKook Steel and Vina Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BooKook Steel Co and Vina Technology Co, you can compare the effects of market volatilities on BooKook Steel and Vina Technology 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 BooKook Steel with a short position of Vina Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and Vina Technology.

Diversification Opportunities for BooKook Steel and Vina Technology

0.68

Correlation Coefficient

BooKook Steel  Vina Technology

Poor diversification

The 3 months correlation between BooKook and Vina is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and Vina Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina Technology and BooKook Steel 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 BooKook Steel Co are associated (or correlated) with Vina Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina Technology has no effect on the direction of BooKook Steel i.e., BooKook Steel and Vina Technology go up and down completely randomly.

Pair Corralation between BooKook Steel and Vina Technology

Assuming the 90 days trading horizon BooKook Steel Co is expected to under-perform the Vina Technology. But the stock apears to be less risky and, when comparing its historical volatility, BooKook Steel Co is 1.22 times less risky than Vina Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Vina Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,791,383  in Vina Technology Co on October 22, 2024 and sell it today you would lose (1,071,383) from holding Vina Technology Co or give up 28.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BooKook Steel Co  vs.  Vina Technology Co

BooKook Steel

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BooKook Steel Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BooKook Steel may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vina Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vina Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BooKook Steel and Vina Technology

The main advantage of trading using opposite BooKook Steel and Vina Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, Vina Technology 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 Vina Technology will offset losses from the drop in Vina Technology's long position.

The idea behind BooKook Steel Co and Vina Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.