Correlation Between BaoMinh Insurance and Thong Nhat
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Thong Nhat 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 Thong Nhat 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 Thong Nhat Rubber, you can compare the effects of market volatilities on BaoMinh Insurance and Thong Nhat 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 Thong Nhat. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Thong Nhat.
Diversification Opportunities for BaoMinh Insurance and Thong Nhat
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BaoMinh and Thong is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Thong Nhat Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thong Nhat Rubber 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 Thong Nhat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thong Nhat Rubber has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Thong Nhat go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Thong Nhat
Assuming the 90 days trading horizon BaoMinh Insurance Corp is expected to generate 0.36 times more return on investment than Thong Nhat. However, BaoMinh Insurance Corp is 2.79 times less risky than Thong Nhat. It trades about 0.04 of its potential returns per unit of risk. Thong Nhat Rubber is currently generating about -0.04 per unit of risk. If you would invest 1,668,408 in BaoMinh Insurance Corp on September 2, 2024 and sell it today you would earn a total of 456,592 from holding BaoMinh Insurance Corp or generate 27.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 43.81% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. Thong Nhat Rubber
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Thong Nhat Rubber |
BaoMinh Insurance and Thong Nhat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Thong Nhat
The main advantage of trading using opposite BaoMinh Insurance and Thong Nhat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Thong Nhat 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 Thong Nhat will offset losses from the drop in Thong Nhat'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 |
| Thong Nhat vs. BaoMinh Insurance Corp | Thong Nhat vs. Song Hong Aluminum | Thong Nhat vs. Hanoi Beer Alcohol | Thong Nhat vs. Southern Rubber Industry |
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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