Correlation Between BIDV Insurance and Phuoc Hoa
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Phuoc Hoa 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 Phuoc Hoa 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 Phuoc Hoa Rubber, you can compare the effects of market volatilities on BIDV Insurance and Phuoc Hoa 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 Phuoc Hoa. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Phuoc Hoa.
Diversification Opportunities for BIDV Insurance and Phuoc Hoa
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BIDV and Phuoc is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Phuoc Hoa Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phuoc Hoa Rubber 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 Phuoc Hoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phuoc Hoa Rubber has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Phuoc Hoa go up and down completely randomly.
Pair Corralation between BIDV Insurance and Phuoc Hoa
Assuming the 90 days trading horizon BIDV Insurance Corp is expected to generate 0.91 times more return on investment than Phuoc Hoa. However, BIDV Insurance Corp is 1.1 times less risky than Phuoc Hoa. It trades about 0.0 of its potential returns per unit of risk. Phuoc Hoa Rubber is currently generating about -0.2 per unit of risk. If you would invest 3,440,000 in BIDV Insurance Corp on October 22, 2024 and sell it today you would earn a total of 0.00 from holding BIDV Insurance Corp or generate 0.0% 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. Phuoc Hoa Rubber
Performance |
| Timeline |
| BIDV Insurance Corp |
| Phuoc Hoa Rubber |
BIDV Insurance and Phuoc Hoa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIDV Insurance and Phuoc Hoa
The main advantage of trading using opposite BIDV Insurance and Phuoc Hoa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Phuoc Hoa 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 Phuoc Hoa will offset losses from the drop in Phuoc Hoa'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 |
| Phuoc Hoa vs. FIT INVEST JSC | Phuoc Hoa vs. Damsan JSC | Phuoc Hoa vs. An Phat Plastic | Phuoc Hoa vs. APG Securities Joint |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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