Correlation Between BIDV Insurance and Vincom Retail
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Vincom Retail 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 Vincom Retail 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 Vincom Retail JSC, you can compare the effects of market volatilities on BIDV Insurance and Vincom Retail 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 Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Vincom Retail.
Diversification Opportunities for BIDV Insurance and Vincom Retail
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BIDV and Vincom is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC 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 Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Vincom Retail go up and down completely randomly.
Pair Corralation between BIDV Insurance and Vincom Retail
Assuming the 90 days trading horizon BIDV Insurance Corp is expected to generate 0.89 times more return on investment than Vincom Retail. However, BIDV Insurance Corp is 1.12 times less risky than Vincom Retail. It trades about -0.04 of its potential returns per unit of risk. Vincom Retail JSC is currently generating about -0.14 per unit of risk. If you would invest 3,385,000 in BIDV Insurance Corp on October 30, 2024 and sell it today you would lose (30,000) from holding BIDV Insurance Corp or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIDV Insurance Corp vs. Vincom Retail JSC
Performance |
| Timeline |
| BIDV Insurance Corp |
| Vincom Retail JSC |
BIDV Insurance and Vincom Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIDV Insurance and Vincom Retail
The main advantage of trading using opposite BIDV Insurance and Vincom Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Vincom Retail 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 Vincom Retail will offset losses from the drop in Vincom Retail's long position.| BIDV Insurance vs. Vu Dang Investment | BIDV Insurance vs. Taseco Air Services | BIDV Insurance vs. Duong Hieu Trading | BIDV Insurance vs. Sea Air Freight |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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