Correlation Between Vina2 Investment and AgriBank Securities

Can any of the company-specific risk be diversified away by investing in both Vina2 Investment and AgriBank Securities 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 Vina2 Investment and AgriBank Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vina2 Investment and and AgriBank Securities JSC, you can compare the effects of market volatilities on Vina2 Investment and AgriBank Securities 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 Vina2 Investment with a short position of AgriBank Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vina2 Investment and AgriBank Securities.

Diversification Opportunities for Vina2 Investment and AgriBank Securities

0.24

Correlation Coefficient

Vina2 Investment  AgriBank Securities

Modest diversification

The 3 months correlation between Vina2 and AgriBank is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vina2 Investment and and AgriBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriBank Securities JSC and Vina2 Investment 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 Vina2 Investment and are associated (or correlated) with AgriBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriBank Securities JSC has no effect on the direction of Vina2 Investment i.e., Vina2 Investment and AgriBank Securities go up and down completely randomly.

Pair Corralation between Vina2 Investment and AgriBank Securities

Assuming the 90 days trading horizon Vina2 Investment and is expected to under-perform the AgriBank Securities. In addition to that, Vina2 Investment is 1.85 times more volatile than AgriBank Securities JSC. It trades about -0.02 of its total potential returns per unit of risk. AgriBank Securities JSC is currently generating about 0.45 per unit of volatility. If you would invest  1,640,000  in AgriBank Securities JSC on December 3, 2024 and sell it today you would earn a total of  185,000  from holding AgriBank Securities JSC or generate 11.28% return on investment over 90 days.

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

Vina2 Investment and  vs.  AgriBank Securities JSC

Vina2 Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vina2 Investment and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vina2 Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

AgriBank Securities JSC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AgriBank Securities JSC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, AgriBank Securities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vina2 Investment and AgriBank Securities

The main advantage of trading using opposite Vina2 Investment and AgriBank Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vina2 Investment position performs unexpectedly, AgriBank Securities 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 AgriBank Securities will offset losses from the drop in AgriBank Securities' long position.

The idea behind Vina2 Investment and and AgriBank Securities 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.