Correlation Between Sao Ta and Bentre Aquaproduct

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

By analyzing existing cross correlation between Sao Ta Foods and Bentre Aquaproduct Import, you can compare the effects of market volatilities on Sao Ta and Bentre Aquaproduct 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 Sao Ta with a short position of Bentre Aquaproduct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Ta and Bentre Aquaproduct.

Diversification Opportunities for Sao Ta and Bentre Aquaproduct

-0.1

Correlation Coefficient

Sao Ta  Bentre Aquaproduct

Good diversification

The 3 months correlation between Sao and Bentre is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sao Ta Foods and Bentre Aquaproduct Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bentre Aquaproduct Import and Sao Ta 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 Sao Ta Foods are associated (or correlated) with Bentre Aquaproduct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bentre Aquaproduct Import has no effect on the direction of Sao Ta i.e., Sao Ta and Bentre Aquaproduct go up and down completely randomly.

Pair Corralation between Sao Ta and Bentre Aquaproduct

Assuming the 90 days trading horizon Sao Ta Foods is expected to under-perform the Bentre Aquaproduct. In addition to that, Sao Ta is 1.5 times more volatile than Bentre Aquaproduct Import. It trades about -0.3 of its total potential returns per unit of risk. Bentre Aquaproduct Import is currently generating about 0.21 per unit of volatility. If you would invest  3,865,000  in Bentre Aquaproduct Import on October 10, 2024 and sell it today you would earn a total of  75,000  from holding Bentre Aquaproduct Import or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

Sao Ta Foods  vs.  Bentre Aquaproduct Import

Sao Ta Foods

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bentre Aquaproduct Import

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Bentre Aquaproduct Import has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Sao Ta and Bentre Aquaproduct

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

The idea behind Sao Ta Foods and Bentre Aquaproduct Import 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.