Correlation Between BIDV Insurance and Van Dien
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Van Dien 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 Van Dien 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 Van Dien Fused, you can compare the effects of market volatilities on BIDV Insurance and Van Dien 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 Van Dien. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Van Dien.
Diversification Opportunities for BIDV Insurance and Van Dien
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BIDV and Van is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Van Dien Fused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Dien Fused 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 Van Dien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Dien Fused has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Van Dien go up and down completely randomly.
Pair Corralation between BIDV Insurance and Van Dien
Assuming the 90 days trading horizon BIDV Insurance is expected to generate 2.98 times less return on investment than Van Dien. But when comparing it to its historical volatility, BIDV Insurance Corp is 2.29 times less risky than Van Dien. It trades about 0.06 of its potential returns per unit of risk. Van Dien Fused is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 647,442 in Van Dien Fused on September 16, 2024 and sell it today you would earn a total of 752,558 from holding Van Dien Fused or generate 116.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.39% |
| Values | Daily Returns |
BIDV Insurance Corp vs. Van Dien Fused
Performance |
| Timeline |
| BIDV Insurance Corp |
| Van Dien Fused |
BIDV Insurance and Van Dien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIDV Insurance and Van Dien
The main advantage of trading using opposite BIDV Insurance and Van Dien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Van Dien 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 Van Dien will offset losses from the drop in Van Dien's long position.| BIDV Insurance vs. Dinhvu Port Investment | BIDV Insurance vs. Dong A Hotel | BIDV Insurance vs. Tin Nghia Industrial | BIDV Insurance vs. PV2 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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