Correlation Between BaoMinh Insurance and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Fecon Mining 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 Fecon Mining 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 Fecon Mining JSC, you can compare the effects of market volatilities on BaoMinh Insurance and Fecon Mining 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 Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Fecon Mining.
Diversification Opportunities for BaoMinh Insurance and Fecon Mining
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BaoMinh and Fecon is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Fecon Mining JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fecon Mining 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 Fecon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fecon Mining JSC has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Fecon Mining go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Fecon Mining
Assuming the 90 days trading horizon BaoMinh Insurance Corp is expected to generate 1.25 times more return on investment than Fecon Mining. However, BaoMinh Insurance is 1.25 times more volatile than Fecon Mining JSC. It trades about -0.02 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about -0.08 per unit of risk. If you would invest 2,068,182 in BaoMinh Insurance Corp on August 30, 2024 and sell it today you would lose (33,182) from holding BaoMinh Insurance Corp or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. Fecon Mining JSC
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Fecon Mining JSC |
BaoMinh Insurance and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Fecon Mining
The main advantage of trading using opposite BaoMinh Insurance and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Fecon Mining 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 Fecon Mining will offset losses from the drop in Fecon Mining's long position.| BaoMinh Insurance vs. FIT INVEST JSC | BaoMinh Insurance vs. Damsan JSC | BaoMinh Insurance vs. An Phat Plastic | BaoMinh Insurance vs. APG Securities Joint |
| Fecon Mining vs. Vu Dang Investment | Fecon Mining vs. HVC Investment and | Fecon Mining vs. Vina2 Investment and | Fecon Mining vs. BaoMinh Insurance Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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