Correlation Between Binh Duong and Military Commercial

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

By analyzing existing cross correlation between Binh Duong Trade and Military Commercial Joint, you can compare the effects of market volatilities on Binh Duong and Military Commercial 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 Duong with a short position of Military Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Military Commercial.

Diversification Opportunities for Binh Duong and Military Commercial

0.32

Correlation Coefficient

Binh Duong  Military Commercial

Weak diversification

The 3 months correlation between Binh and Military is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Trade and Military Commercial Joint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Military Commercial Joint and Binh Duong 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 Duong Trade are associated (or correlated) with Military Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Military Commercial Joint has no effect on the direction of Binh Duong i.e., Binh Duong and Military Commercial go up and down completely randomly.

Pair Corralation between Binh Duong and Military Commercial

Assuming the 90 days trading horizon Binh Duong is expected to generate 2.05 times less return on investment than Military Commercial. In addition to that, Binh Duong is 1.49 times more volatile than Military Commercial Joint. It trades about 0.07 of its total potential returns per unit of risk. Military Commercial Joint is currently generating about 0.21 per unit of volatility. If you would invest  2,126,100  in Military Commercial Joint on October 26, 2024 and sell it today you would earn a total of  113,900  from holding Military Commercial Joint or generate 5.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Binh Duong Trade  vs.  Military Commercial Joint

Binh Duong Trade

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Binh Duong Trade are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Binh Duong displayed solid returns over the last few months and may actually be approaching a breakup point.

Military Commercial Joint

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Military Commercial Joint are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Military Commercial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Binh Duong and Military Commercial

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

The idea behind Binh Duong Trade and Military Commercial Joint 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.