Correlation Between 1369 Construction and Binhthuan Agriculture

Can any of the company-specific risk be diversified away by investing in both 1369 Construction and Binhthuan Agriculture 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 1369 Construction and Binhthuan Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1369 Construction JSC and Binhthuan Agriculture Services, you can compare the effects of market volatilities on 1369 Construction and Binhthuan Agriculture 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 1369 Construction with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1369 Construction and Binhthuan Agriculture.

Diversification Opportunities for 1369 Construction and Binhthuan Agriculture

-0.39

Correlation Coefficient

1369 Construction  Binhthuan Agriculture

Very good diversification

The 3 months correlation between 1369 and Binhthuan is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding 1369 Construction JSC and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and 1369 Construction 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 1369 Construction JSC are associated (or correlated) with Binhthuan Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binhthuan Agriculture has no effect on the direction of 1369 Construction i.e., 1369 Construction and Binhthuan Agriculture go up and down completely randomly.

Pair Corralation between 1369 Construction and Binhthuan Agriculture

Assuming the 90 days trading horizon 1369 Construction JSC is expected to under-perform the Binhthuan Agriculture. But the stock apears to be less risky and, when comparing its historical volatility, 1369 Construction JSC is 2.45 times less risky than Binhthuan Agriculture. The stock trades about -0.04 of its potential returns per unit of risk. The Binhthuan Agriculture Services is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  401,000  in Binhthuan Agriculture Services on October 6, 2024 and sell it today you would earn a total of  64,000  from holding Binhthuan Agriculture Services or generate 15.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

1369 Construction JSC  vs.  Binhthuan Agriculture Services

1369 Construction JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1369 Construction JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Binhthuan Agriculture

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Binhthuan Agriculture Services are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Binhthuan Agriculture may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 1369 Construction and Binhthuan Agriculture

The main advantage of trading using opposite 1369 Construction and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1369 Construction position performs unexpectedly, Binhthuan Agriculture 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 Binhthuan Agriculture will offset losses from the drop in Binhthuan Agriculture's long position.

The idea behind 1369 Construction JSC and Binhthuan Agriculture Services 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.