Correlation Between Post and Binhthuan Agriculture

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

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

Diversification Opportunities for Post and Binhthuan Agriculture

-0.23

Correlation Coefficient

Post  Binhthuan Agriculture

Very good diversification

The 3 months correlation between Post and Binhthuan is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and Post 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 Post and Telecommunications 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 Post i.e., Post and Binhthuan Agriculture go up and down completely randomly.

Pair Corralation between Post and Binhthuan Agriculture

Assuming the 90 days trading horizon Post and Telecommunications is expected to generate 1.53 times more return on investment than Binhthuan Agriculture. However, Post is 1.53 times more volatile than Binhthuan Agriculture Services. It trades about 0.15 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about -0.11 per unit of risk. If you would invest  452,000  in Post and Telecommunications on December 30, 2024 and sell it today you would earn a total of  118,000  from holding Post and Telecommunications or generate 26.11% return on investment over 90 days.

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

Post and Telecommunications  vs.  Binhthuan Agriculture Services

Post and Telecommuni

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Post and Telecommunications are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Post displayed solid returns over the last few months and may actually be approaching a breakup point.

Binhthuan Agriculture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Binhthuan Agriculture Services 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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Post and Binhthuan Agriculture

The main advantage of trading using opposite Post and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post 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 Post and Telecommunications 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.