Correlation Between SSI Securities and Binhthuan Agriculture

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

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

Diversification Opportunities for SSI Securities and Binhthuan Agriculture

0.29

Correlation Coefficient

SSI Securities  Binhthuan Agriculture

Modest diversification

The 3 months correlation between SSI and Binhthuan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SSI Securities Corp and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and SSI Securities 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 SSI Securities Corp 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 SSI Securities i.e., SSI Securities and Binhthuan Agriculture go up and down completely randomly.

Pair Corralation between SSI Securities and Binhthuan Agriculture

Assuming the 90 days trading horizon SSI Securities is expected to generate 2.98 times less return on investment than Binhthuan Agriculture. But when comparing it to its historical volatility, SSI Securities Corp is 1.83 times less risky than Binhthuan Agriculture. It trades about 0.25 of its potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  384,000  in Binhthuan Agriculture Services on September 20, 2024 and sell it today you would earn a total of  123,000  from holding Binhthuan Agriculture Services or generate 32.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SSI Securities Corp  vs.  Binhthuan Agriculture Services

SSI Securities Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Binhthuan Agriculture

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Binhthuan Agriculture Services are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Binhthuan Agriculture displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSI Securities and Binhthuan Agriculture

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