Correlation Between BIDV Insurance and DOMESCO Medical
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and DOMESCO Medical 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 BIDV Insurance and DOMESCO Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIDV Insurance Corp and DOMESCO Medical Import, you can compare the effects of market volatilities on BIDV Insurance and DOMESCO Medical 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 BIDV Insurance with a short position of DOMESCO Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and DOMESCO Medical.
Diversification Opportunities for BIDV Insurance and DOMESCO Medical
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BIDV and DOMESCO is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and DOMESCO Medical Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOMESCO Medical Import and BIDV Insurance 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 BIDV Insurance Corp are associated (or correlated) with DOMESCO Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOMESCO Medical Import has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and DOMESCO Medical go up and down completely randomly.
Pair Corralation between BIDV Insurance and DOMESCO Medical
Assuming the 90 days trading horizon BIDV Insurance is expected to generate 164.41 times less return on investment than DOMESCO Medical. But when comparing it to its historical volatility, BIDV Insurance Corp is 2.95 times less risky than DOMESCO Medical. It trades about 0.0 of its potential returns per unit of risk. DOMESCO Medical Import is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6,450,000 in DOMESCO Medical Import on October 22, 2024 and sell it today you would earn a total of 990,000 from holding DOMESCO Medical Import or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIDV Insurance Corp vs. DOMESCO Medical Import
Performance |
| Timeline |
| BIDV Insurance Corp |
| DOMESCO Medical Import |
BIDV Insurance and DOMESCO Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIDV Insurance and DOMESCO Medical
The main advantage of trading using opposite BIDV Insurance and DOMESCO Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, DOMESCO Medical 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 DOMESCO Medical will offset losses from the drop in DOMESCO Medical's long position.| BIDV Insurance vs. Petrolimex Information Technology | BIDV Insurance vs. South Books Educational | BIDV Insurance vs. Truong Thanh Furniture | BIDV Insurance vs. Ha Noi Education |
| DOMESCO Medical vs. Dong A Hotel | DOMESCO Medical vs. Thanh Dat Investment | DOMESCO Medical vs. Long Giang Investment | DOMESCO Medical vs. Sea Air Freight |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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