Correlation Between Vincom Retail and Bentre Aquaproduct

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

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

Diversification Opportunities for Vincom Retail and Bentre Aquaproduct

0.75

Correlation Coefficient

Vincom Retail  Bentre Aquaproduct

Poor diversification

The 3 months correlation between Vincom and Bentre is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail JSC and Bentre Aquaproduct Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bentre Aquaproduct Import and Vincom Retail 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 Vincom Retail JSC are associated (or correlated) with Bentre Aquaproduct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bentre Aquaproduct Import has no effect on the direction of Vincom Retail i.e., Vincom Retail and Bentre Aquaproduct go up and down completely randomly.

Pair Corralation between Vincom Retail and Bentre Aquaproduct

Assuming the 90 days trading horizon Vincom Retail JSC is expected to under-perform the Bentre Aquaproduct. But the stock apears to be less risky and, when comparing its historical volatility, Vincom Retail JSC is 1.27 times less risky than Bentre Aquaproduct. The stock trades about -0.04 of its potential returns per unit of risk. The Bentre Aquaproduct Import is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,940,045  in Bentre Aquaproduct Import on September 17, 2024 and sell it today you would earn a total of  969,955  from holding Bentre Aquaproduct Import or generate 32.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	73.79%
Values	Daily Returns

Vincom Retail JSC  vs.  Bentre Aquaproduct Import

Vincom Retail JSC

Risk-Adjusted Performance

0 of 100

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 latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Bentre Aquaproduct Import

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bentre Aquaproduct Import has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Vincom Retail and Bentre Aquaproduct

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

The idea behind Vincom Retail JSC and Bentre Aquaproduct Import 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..