Correlation Between Vnsteel Vicasa and AgriBank Securities

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

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

Diversification Opportunities for Vnsteel Vicasa and AgriBank Securities

-0.15

Correlation Coefficient

Vnsteel Vicasa  AgriBank Securities

Good diversification

The 3 months correlation between Vnsteel and AgriBank is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Vnsteel Vicasa JSC 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 Vnsteel Vicasa 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 Vnsteel Vicasa JSC 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 Vnsteel Vicasa i.e., Vnsteel Vicasa and AgriBank Securities go up and down completely randomly.

Pair Corralation between Vnsteel Vicasa and AgriBank Securities

Assuming the 90 days trading horizon Vnsteel Vicasa JSC is expected to generate 2.06 times more return on investment than AgriBank Securities. However, Vnsteel Vicasa is 2.06 times more volatile than AgriBank Securities JSC. It trades about 0.49 of its potential returns per unit of risk. AgriBank Securities JSC is currently generating about 0.0 per unit of risk. If you would invest  870,000  in Vnsteel Vicasa JSC on September 13, 2024 and sell it today you would earn a total of  775,000  from holding Vnsteel Vicasa JSC or generate 89.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.92%
Values	Daily Returns

Vnsteel Vicasa JSC  vs.  AgriBank Securities JSC

Vnsteel Vicasa JSC

Risk-Adjusted Performance

38 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vnsteel Vicasa JSC are ranked lower than 38 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vnsteel Vicasa displayed solid returns over the last few months and may actually be approaching a breakup point.

AgriBank Securities JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vnsteel Vicasa and AgriBank Securities

The main advantage of trading using opposite Vnsteel Vicasa and AgriBank Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vnsteel Vicasa 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 Vnsteel Vicasa JSC 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.