Correlation Between BIDV Insurance and Pha Le
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on BIDV Insurance and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Pha Le.
Diversification Opportunities for BIDV Insurance and Pha Le
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between BIDV and Pha is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Pha Le go up and down completely randomly.
Pair Corralation between BIDV Insurance and Pha Le
Assuming the 90 days trading horizon BIDV Insurance Corp is expected to generate 1.09 times more return on investment than Pha Le. However, BIDV Insurance is 1.09 times more volatile than Pha Le Plastics. It trades about 0.06 of its potential returns per unit of risk. Pha Le Plastics is currently generating about 0.01 per unit of risk. If you would invest 2,675,538 in BIDV Insurance Corp on October 22, 2024 and sell it today you would earn a total of 709,462 from holding BIDV Insurance Corp or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
BIDV Insurance Corp vs. Pha Le Plastics
Performance |
| Timeline |
| BIDV Insurance Corp |
| Pha Le Plastics |
BIDV Insurance and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIDV Insurance and Pha Le
The main advantage of trading using opposite BIDV Insurance and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le'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 |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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