Correlation Between Binh Duong and Techno Agricultural

Can any of the company-specific risk be diversified away by investing in both Binh Duong and Techno Agricultural 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 Techno Agricultural 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 Techno Agricultural Supplying, you can compare the effects of market volatilities on Binh Duong and Techno Agricultural 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 Techno Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Techno Agricultural.

Diversification Opportunities for Binh Duong and Techno Agricultural

-0.64

Correlation Coefficient

Binh Duong  Techno Agricultural

Excellent diversification

The 3 months correlation between Binh and Techno is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Trade and Techno Agricultural Supplying in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techno Agricultural 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 Techno Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techno Agricultural has no effect on the direction of Binh Duong i.e., Binh Duong and Techno Agricultural go up and down completely randomly.

Pair Corralation between Binh Duong and Techno Agricultural

Assuming the 90 days trading horizon Binh Duong Trade is expected to generate 1.49 times more return on investment than Techno Agricultural. However, Binh Duong is 1.49 times more volatile than Techno Agricultural Supplying. It trades about 0.14 of its potential returns per unit of risk. Techno Agricultural Supplying is currently generating about -0.23 per unit of risk. If you would invest  970,000  in Binh Duong Trade on October 21, 2024 and sell it today you would earn a total of  120,000  from holding Binh Duong Trade or generate 12.37% return on investment over 90 days.

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

Binh Duong Trade  vs.  Techno Agricultural Supplying

Binh Duong Trade

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Binh Duong Trade are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Binh Duong may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Techno Agricultural

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techno Agricultural Supplying 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 fundamental 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.

Pair Trading with Binh Duong and Techno Agricultural

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

The idea behind Binh Duong Trade and Techno Agricultural Supplying 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.