Correlation Between Bentre Aquaproduct and Construction JSC

Can any of the company-specific risk be diversified away by investing in both Bentre Aquaproduct and Construction JSC 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 Construction JSC 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 Construction JSC No5, you can compare the effects of market volatilities on Bentre Aquaproduct and Construction JSC 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 Construction JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentre Aquaproduct and Construction JSC.

Diversification Opportunities for Bentre Aquaproduct and Construction JSC

-0.34

Correlation Coefficient

Bentre Aquaproduct  Construction JSC

Very good diversification

The 3 months correlation between Bentre and Construction is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bentre Aquaproduct Import and Construction JSC No5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construction JSC No5 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 Construction JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construction JSC No5 has no effect on the direction of Bentre Aquaproduct i.e., Bentre Aquaproduct and Construction JSC go up and down completely randomly.

Pair Corralation between Bentre Aquaproduct and Construction JSC

Assuming the 90 days trading horizon Bentre Aquaproduct is expected to generate 8.22 times less return on investment than Construction JSC. But when comparing it to its historical volatility, Bentre Aquaproduct Import is 5.67 times less risky than Construction JSC. It trades about 0.22 of its potential returns per unit of risk. Construction JSC No5 is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  2,000,000  in Construction JSC No5 on October 9, 2024 and sell it today you would earn a total of  200,000  from holding Construction JSC No5 or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.5%
Values	Daily Returns

Bentre Aquaproduct Import  vs.  Construction JSC No5

Bentre Aquaproduct Import

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bentre Aquaproduct Import are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Bentre Aquaproduct is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Construction JSC No5

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Construction JSC No5 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Construction JSC displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bentre Aquaproduct and Construction JSC

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

The idea behind Bentre Aquaproduct Import and Construction JSC No5 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.