Correlation Between BIDV Insurance and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Hochiminh City 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 Hochiminh City 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 Hochiminh City Metal, you can compare the effects of market volatilities on BIDV Insurance and Hochiminh City 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 Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Hochiminh City.
Diversification Opportunities for BIDV Insurance and Hochiminh City
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BIDV and Hochiminh is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal 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 Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Hochiminh City go up and down completely randomly.
Pair Corralation between BIDV Insurance and Hochiminh City
Assuming the 90 days trading horizon BIDV Insurance Corp is expected to generate 1.18 times more return on investment than Hochiminh City. However, BIDV Insurance is 1.18 times more volatile than Hochiminh City Metal. It trades about 0.05 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about 0.03 per unit of risk. If you would invest 2,563,608 in BIDV Insurance Corp on August 31, 2024 and sell it today you would earn a total of 746,392 from holding BIDV Insurance Corp or generate 29.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIDV Insurance Corp vs. Hochiminh City Metal
Performance |
| Timeline |
| BIDV Insurance Corp |
| Hochiminh City Metal |
BIDV Insurance and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIDV Insurance and Hochiminh City
The main advantage of trading using opposite BIDV Insurance and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.| BIDV Insurance vs. MST Investment JSC | BIDV Insurance vs. HUD1 Investment and | BIDV Insurance vs. Vincom Retail JSC | BIDV Insurance vs. Everland Investment JSC |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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