Correlation Between Bentre Aquaproduct and Ducgiang Chemicals

Can any of the company-specific risk be diversified away by investing in both Bentre Aquaproduct and Ducgiang Chemicals 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 Bentre Aquaproduct and Ducgiang Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bentre Aquaproduct Import and Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on Bentre Aquaproduct and Ducgiang Chemicals 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 Bentre Aquaproduct with a short position of Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentre Aquaproduct and Ducgiang Chemicals.

Diversification Opportunities for Bentre Aquaproduct and Ducgiang Chemicals

-0.39

Correlation Coefficient

Bentre Aquaproduct  Ducgiang Chemicals

Very good diversification

The 3 months correlation between Bentre and Ducgiang is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bentre Aquaproduct Import and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang Chemicals and Bentre Aquaproduct 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 Bentre Aquaproduct Import are associated (or correlated) with Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of Bentre Aquaproduct i.e., Bentre Aquaproduct and Ducgiang Chemicals go up and down completely randomly.

Pair Corralation between Bentre Aquaproduct and Ducgiang Chemicals

Assuming the 90 days trading horizon Bentre Aquaproduct Import is expected to generate 1.51 times more return on investment than Ducgiang Chemicals. However, Bentre Aquaproduct is 1.51 times more volatile than Ducgiang Chemicals Detergent. It trades about 0.25 of its potential returns per unit of risk. Ducgiang Chemicals Detergent is currently generating about -0.17 per unit of risk. If you would invest  3,676,017  in Bentre Aquaproduct Import on December 22, 2024 and sell it today you would earn a total of  893,983  from holding Bentre Aquaproduct Import or generate 24.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Bentre Aquaproduct Import  vs.  Ducgiang Chemicals Detergent

Bentre Aquaproduct Import

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bentre Aquaproduct Import are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bentre Aquaproduct displayed solid returns over the last few months and may actually be approaching a breakup point.

Ducgiang Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ducgiang Chemicals Detergent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Bentre Aquaproduct and Ducgiang Chemicals

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

The idea behind Bentre Aquaproduct Import and Ducgiang Chemicals Detergent 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.