Correlation Between Techno Agricultural and Vincom Retail

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

By analyzing existing cross correlation between Techno Agricultural Supplying and Vincom Retail JSC, you can compare the effects of market volatilities on Techno Agricultural and Vincom Retail 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 Techno Agricultural with a short position of Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techno Agricultural and Vincom Retail.

Diversification Opportunities for Techno Agricultural and Vincom Retail

0.08

Correlation Coefficient

Techno Agricultural  Vincom Retail

Significant diversification

The 3 months correlation between Techno and Vincom is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Techno Agricultural Supplying and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC and Techno Agricultural 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 Techno Agricultural Supplying are associated (or correlated) with Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of Techno Agricultural i.e., Techno Agricultural and Vincom Retail go up and down completely randomly.

Pair Corralation between Techno Agricultural and Vincom Retail

Assuming the 90 days trading horizon Techno Agricultural Supplying is expected to under-perform the Vincom Retail. But the stock apears to be less risky and, when comparing its historical volatility, Techno Agricultural Supplying is 1.01 times less risky than Vincom Retail. The stock trades about -0.1 of its potential returns per unit of risk. The Vincom Retail JSC is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  3,030,000  in Vincom Retail JSC on December 5, 2024 and sell it today you would lose (1,260,000) from holding Vincom Retail JSC or give up 41.58% of portfolio value over 90 days.

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

Techno Agricultural Supplying  vs.  Vincom Retail JSC

Techno Agricultural

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Techno Agricultural Supplying are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Techno Agricultural may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Vincom Retail JSC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Techno Agricultural and Vincom Retail

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

The idea behind Techno Agricultural Supplying and Vincom Retail JSC 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.