Correlation Between BaoMinh Insurance and AgriBank Securities
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and AgriBank Securities 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 BaoMinh Insurance and AgriBank Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BaoMinh Insurance Corp and AgriBank Securities JSC, you can compare the effects of market volatilities on BaoMinh Insurance and AgriBank Securities 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 BaoMinh Insurance with a short position of AgriBank Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and AgriBank Securities.
Diversification Opportunities for BaoMinh Insurance and AgriBank Securities
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BaoMinh and AgriBank is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and AgriBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriBank Securities JSC and BaoMinh 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 BaoMinh Insurance Corp are associated (or correlated) with AgriBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriBank Securities JSC has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and AgriBank Securities go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and AgriBank Securities
Assuming the 90 days trading horizon BaoMinh Insurance Corp is expected to generate 0.76 times more return on investment than AgriBank Securities. However, BaoMinh Insurance Corp is 1.31 times less risky than AgriBank Securities. It trades about 0.04 of its potential returns per unit of risk. AgriBank Securities JSC is currently generating about 0.03 per unit of risk. If you would invest 1,872,934 in BaoMinh Insurance Corp on September 2, 2024 and sell it today you would earn a total of 252,066 from holding BaoMinh Insurance Corp or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. AgriBank Securities JSC
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| AgriBank Securities JSC |
BaoMinh Insurance and AgriBank Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and AgriBank Securities
The main advantage of trading using opposite BaoMinh Insurance and AgriBank Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, AgriBank Securities 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 AgriBank Securities will offset losses from the drop in AgriBank Securities' long position.| BaoMinh Insurance vs. FIT INVEST JSC | BaoMinh Insurance vs. Damsan JSC | BaoMinh Insurance vs. An Phat Plastic | BaoMinh Insurance vs. Alphanam ME |
| AgriBank Securities vs. Damsan JSC | AgriBank Securities vs. An Phat Plastic | AgriBank Securities vs. Alphanam ME | AgriBank Securities vs. Binhthuan Agriculture Services |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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