Correlation Between BaoMinh Insurance and Saigon Viendong
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Saigon Viendong 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 Saigon Viendong 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 Saigon Viendong Technology, you can compare the effects of market volatilities on BaoMinh Insurance and Saigon Viendong 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 Saigon Viendong. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Saigon Viendong.
Diversification Opportunities for BaoMinh Insurance and Saigon Viendong
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BaoMinh and Saigon is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Saigon Viendong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Viendong Tech 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 Saigon Viendong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Viendong Tech has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Saigon Viendong go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Saigon Viendong
Assuming the 90 days trading horizon BaoMinh Insurance Corp is expected to under-perform the Saigon Viendong. But the stock apears to be less risky and, when comparing its historical volatility, BaoMinh Insurance Corp is 1.98 times less risky than Saigon Viendong. The stock trades about -0.16 of its potential returns per unit of risk. The Saigon Viendong Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,155,000 in Saigon Viendong Technology on October 12, 2024 and sell it today you would lose (15,000) from holding Saigon Viendong Technology or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. Saigon Viendong Technology
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Saigon Viendong Tech |
BaoMinh Insurance and Saigon Viendong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Saigon Viendong
The main advantage of trading using opposite BaoMinh Insurance and Saigon Viendong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Saigon Viendong 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 Saigon Viendong will offset losses from the drop in Saigon Viendong'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 |
| Saigon Viendong vs. FIT INVEST JSC | Saigon Viendong vs. Damsan JSC | Saigon Viendong vs. An Phat Plastic | Saigon Viendong 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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