Correlation Between Binh Thuan and Tri Viet

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

Diversification Opportunities for Binh Thuan and Tri Viet

0.53

Correlation Coefficient

Binh Thuan  Tri Viet

Very weak diversification

The 3 months correlation between Binh and Tri is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Binh Thuan Books and Tri Viet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tri Viet Management 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 Tri Viet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tri Viet Management has no effect on the direction of Binh Thuan i.e., Binh Thuan and Tri Viet go up and down completely randomly.

Pair Corralation between Binh Thuan and Tri Viet

Assuming the 90 days trading horizon Binh Thuan Books is expected to generate 3.28 times more return on investment than Tri Viet. However, Binh Thuan is 3.28 times more volatile than Tri Viet Management. It trades about 0.02 of its potential returns per unit of risk. Tri Viet Management is currently generating about -0.11 per unit of risk. If you would invest  1,352,685  in Binh Thuan Books on December 20, 2024 and sell it today you would earn a total of  7,315  from holding Binh Thuan Books or generate 0.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	75.86%
Values	Daily Returns

Binh Thuan Books  vs.  Tri Viet Management

Binh Thuan Books

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Binh Thuan Books are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Binh Thuan may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Tri Viet Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tri Viet Management 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 Binh Thuan and Tri Viet

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

The idea behind Binh Thuan Books and Tri Viet Management 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.