Correlation Between BaoMinh Insurance and Vietnam JSCmmercial
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Vietnam JSCmmercial 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 Vietnam JSCmmercial 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 Vietnam JSCmmercial Bank, you can compare the effects of market volatilities on BaoMinh Insurance and Vietnam JSCmmercial 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 Vietnam JSCmmercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Vietnam JSCmmercial.
Diversification Opportunities for BaoMinh Insurance and Vietnam JSCmmercial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BaoMinh and Vietnam is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Vietnam JSCmmercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam JSCmmercial Bank 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 Vietnam JSCmmercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam JSCmmercial Bank has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Vietnam JSCmmercial go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Vietnam JSCmmercial
Assuming the 90 days trading horizon BaoMinh Insurance is expected to generate 1.4 times less return on investment than Vietnam JSCmmercial. In addition to that, BaoMinh Insurance is 1.03 times more volatile than Vietnam JSCmmercial Bank. It trades about 0.04 of its total potential returns per unit of risk. Vietnam JSCmmercial Bank is currently generating about 0.05 per unit of volatility. If you would invest 2,456,563 in Vietnam JSCmmercial Bank on September 2, 2024 and sell it today you would earn a total of 1,118,437 from holding Vietnam JSCmmercial Bank or generate 45.53% 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. Vietnam JSCmmercial Bank
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Vietnam JSCmmercial Bank |
BaoMinh Insurance and Vietnam JSCmmercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Vietnam JSCmmercial
The main advantage of trading using opposite BaoMinh Insurance and Vietnam JSCmmercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Vietnam JSCmmercial 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 Vietnam JSCmmercial will offset losses from the drop in Vietnam JSCmmercial's long position.| BaoMinh Insurance vs. FIT INVEST JSC | BaoMinh Insurance vs. Damsan JSC | BaoMinh Insurance vs. An Phat Plastic | BaoMinh Insurance vs. Alphanam ME |
| Vietnam JSCmmercial vs. FIT INVEST JSC | Vietnam JSCmmercial vs. Damsan JSC | Vietnam JSCmmercial vs. An Phat Plastic | Vietnam JSCmmercial vs. Alphanam ME |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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