Correlation Between BIDV Insurance and Petrolimex Insurance
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Petrolimex Insurance 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 Petrolimex Insurance 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 Petrolimex Insurance Corp, you can compare the effects of market volatilities on BIDV Insurance and Petrolimex Insurance 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 Petrolimex Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Petrolimex Insurance.
Diversification Opportunities for BIDV Insurance and Petrolimex Insurance
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between BIDV and Petrolimex is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Petrolimex Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Insurance Corp 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 Petrolimex Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Insurance Corp has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Petrolimex Insurance go up and down completely randomly.
Pair Corralation between BIDV Insurance and Petrolimex Insurance
Assuming the 90 days trading horizon BIDV Insurance is expected to generate 1.91 times less return on investment than Petrolimex Insurance. But when comparing it to its historical volatility, BIDV Insurance Corp is 1.18 times less risky than Petrolimex Insurance. It trades about 0.18 of its potential returns per unit of risk. Petrolimex Insurance Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,175,000 in Petrolimex Insurance Corp on September 2, 2024 and sell it today you would earn a total of 225,000 from holding Petrolimex Insurance Corp or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
BIDV Insurance Corp vs. Petrolimex Insurance Corp
Performance |
| Timeline |
| BIDV Insurance Corp |
| Petrolimex Insurance Corp |
BIDV Insurance and Petrolimex Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIDV Insurance and Petrolimex Insurance
The main advantage of trading using opposite BIDV Insurance and Petrolimex Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Petrolimex Insurance 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 Petrolimex Insurance will offset losses from the drop in Petrolimex Insurance's long position.| BIDV Insurance vs. FIT INVEST JSC | BIDV Insurance vs. Damsan JSC | BIDV Insurance vs. An Phat Plastic | BIDV Insurance vs. Alphanam ME |
| Petrolimex Insurance vs. FIT INVEST JSC | Petrolimex Insurance vs. Damsan JSC | Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance vs. Alphanam ME |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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