Correlation Between Bentre Aquaproduct and Binh Duong

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

Diversification Opportunities for Bentre Aquaproduct and Binh Duong

-0.49

Correlation Coefficient

Bentre Aquaproduct  Binh Duong

Very good diversification

The 3 months correlation between Bentre and Binh is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bentre Aquaproduct Import and Binh Duong Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Trade 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 Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Trade has no effect on the direction of Bentre Aquaproduct i.e., Bentre Aquaproduct and Binh Duong go up and down completely randomly.

Pair Corralation between Bentre Aquaproduct and Binh Duong

Assuming the 90 days trading horizon Bentre Aquaproduct is expected to generate 1.13 times less return on investment than Binh Duong. But when comparing it to its historical volatility, Bentre Aquaproduct Import is 1.39 times less risky than Binh Duong. It trades about 0.22 of its potential returns per unit of risk. Binh Duong Trade is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,100,000  in Binh Duong Trade on October 9, 2024 and sell it today you would earn a total of  30,000  from holding Binh Duong Trade or generate 2.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.0%
Values	Daily Returns

Bentre Aquaproduct Import  vs.  Binh Duong Trade

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.

Binh Duong Trade

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Binh Duong Trade are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Binh Duong displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bentre Aquaproduct and Binh Duong

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

The idea behind Bentre Aquaproduct Import and Binh Duong Trade 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.