Correlation Between BaoMinh Insurance and Pha Lai
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Pha Lai 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 Pha Lai 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 Pha Lai Thermal, you can compare the effects of market volatilities on BaoMinh Insurance and Pha Lai 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 Pha Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Pha Lai.
Diversification Opportunities for BaoMinh Insurance and Pha Lai
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BaoMinh and Pha is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Pha Lai Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Lai Thermal 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 Pha Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Lai Thermal has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Pha Lai go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Pha Lai
Assuming the 90 days trading horizon BaoMinh Insurance Corp is expected to generate 1.07 times more return on investment than Pha Lai. However, BaoMinh Insurance is 1.07 times more volatile than Pha Lai Thermal. It trades about -0.04 of its potential returns per unit of risk. Pha Lai Thermal is currently generating about -0.38 per unit of risk. If you would invest 2,045,000 in BaoMinh Insurance Corp on August 25, 2024 and sell it today you would lose (30,000) from holding BaoMinh Insurance Corp or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. Pha Lai Thermal
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Pha Lai Thermal |
BaoMinh Insurance and Pha Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Pha Lai
The main advantage of trading using opposite BaoMinh Insurance and Pha Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Pha Lai 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 Pha Lai will offset losses from the drop in Pha Lai'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 |
| Pha Lai vs. FIT INVEST JSC | Pha Lai vs. Damsan JSC | Pha Lai vs. An Phat Plastic | Pha Lai vs. APG Securities Joint |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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