Correlation Between Binh Thuan and Construction

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

By analyzing existing cross correlation between Binh Thuan Books and Construction And Investment, you can compare the effects of market volatilities on Binh Thuan and Construction 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 Binh Thuan with a short position of Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Thuan and Construction.

Diversification Opportunities for Binh Thuan and Construction

0.27

Correlation Coefficient

Binh Thuan  Construction

Modest diversification

The 3 months correlation between Binh and Construction is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Binh Thuan Books and Construction And Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construction And Inv and Binh Thuan 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 Binh Thuan Books are associated (or correlated) with Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construction And Inv has no effect on the direction of Binh Thuan i.e., Binh Thuan and Construction go up and down completely randomly.

Pair Corralation between Binh Thuan and Construction

Assuming the 90 days trading horizon Binh Thuan is expected to generate 24.83 times less return on investment than Construction. In addition to that, Binh Thuan is 1.87 times more volatile than Construction And Investment. It trades about 0.0 of its total potential returns per unit of risk. Construction And Investment is currently generating about 0.07 per unit of volatility. If you would invest  3,940,000  in Construction And Investment on December 24, 2024 and sell it today you would earn a total of  310,000  from holding Construction And Investment or generate 7.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	77.59%
Values	Daily Returns

Binh Thuan Books  vs.  Construction And Investment

Binh Thuan Books

Risk-Adjusted Performance

Very Weak

Over the last 90 days Binh Thuan Books has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Binh Thuan is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Construction And Inv

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Construction And Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Construction may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Binh Thuan and Construction

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

The idea behind Binh Thuan Books and Construction And Investment 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.