Correlation Between BaoMinh Insurance and Sao Ta
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Sao Ta 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 Sao Ta 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 Sao Ta Foods, you can compare the effects of market volatilities on BaoMinh Insurance and Sao Ta 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 Sao Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Sao Ta.
Diversification Opportunities for BaoMinh Insurance and Sao Ta
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BaoMinh and Sao is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Sao Ta Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Ta Foods 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 Sao Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Ta Foods has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Sao Ta go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Sao Ta
Assuming the 90 days trading horizon BaoMinh Insurance is expected to generate 2.57 times less return on investment than Sao Ta. In addition to that, BaoMinh Insurance is 1.19 times more volatile than Sao Ta Foods. It trades about 0.09 of its total potential returns per unit of risk. Sao Ta Foods is currently generating about 0.27 per unit of volatility. If you would invest 4,550,000 in Sao Ta Foods on September 3, 2024 and sell it today you would earn a total of 270,000 from holding Sao Ta Foods or generate 5.93% 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. Sao Ta Foods
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Sao Ta Foods |
BaoMinh Insurance and Sao Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Sao Ta
The main advantage of trading using opposite BaoMinh Insurance and Sao Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Sao Ta 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 Sao Ta will offset losses from the drop in Sao Ta'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 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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