Correlation Between Binhthuan Agriculture and EVN Finance

Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and EVN Finance 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 Binhthuan Agriculture and EVN Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Binhthuan Agriculture Services and EVN Finance JSC, you can compare the effects of market volatilities on Binhthuan Agriculture and EVN Finance 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 Binhthuan Agriculture with a short position of EVN Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and EVN Finance.

Diversification Opportunities for Binhthuan Agriculture and EVN Finance

-0.62

Correlation Coefficient

Binhthuan Agriculture  EVN Finance

Excellent diversification

The 3 months correlation between Binhthuan and EVN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and EVN Finance JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN Finance JSC and Binhthuan Agriculture 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 Binhthuan Agriculture Services are associated (or correlated) with EVN Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN Finance JSC has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and EVN Finance go up and down completely randomly.

Pair Corralation between Binhthuan Agriculture and EVN Finance

Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to generate 0.75 times more return on investment than EVN Finance. However, Binhthuan Agriculture Services is 1.33 times less risky than EVN Finance. It trades about -0.05 of its potential returns per unit of risk. EVN Finance JSC is currently generating about -0.07 per unit of risk. If you would invest  539,000  in Binhthuan Agriculture Services on October 9, 2024 and sell it today you would lose (88,000) from holding Binhthuan Agriculture Services or give up 16.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.41%
Values	Daily Returns

Binhthuan Agriculture Services  vs.  EVN Finance JSC

Binhthuan Agriculture

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Binhthuan Agriculture Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Binhthuan Agriculture may actually be approaching a critical reversion point that can send shares even higher in February 2025.

EVN Finance JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVN Finance JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Binhthuan Agriculture and EVN Finance

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

The idea behind Binhthuan Agriculture Services and EVN Finance JSC 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.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.