Correlation Between BaoMinh Insurance and VNDIRECT Securities
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and VNDIRECT Securities 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 VNDIRECT Securities 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 VNDIRECT Securities Corp, you can compare the effects of market volatilities on BaoMinh Insurance and VNDIRECT Securities 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 VNDIRECT Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and VNDIRECT Securities.
Diversification Opportunities for BaoMinh Insurance and VNDIRECT Securities
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BaoMinh and VNDIRECT is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and VNDIRECT Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VNDIRECT Securities Corp 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 VNDIRECT Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VNDIRECT Securities Corp has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and VNDIRECT Securities go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and VNDIRECT Securities
Assuming the 90 days trading horizon BaoMinh Insurance Corp is expected to generate 0.96 times more return on investment than VNDIRECT Securities. However, BaoMinh Insurance Corp is 1.04 times less risky than VNDIRECT Securities. It trades about 0.06 of its potential returns per unit of risk. VNDIRECT Securities Corp is currently generating about -0.12 per unit of risk. If you would invest 2,095,000 in BaoMinh Insurance Corp on September 2, 2024 and sell it today you would earn a total of 30,000 from holding BaoMinh Insurance Corp or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. VNDIRECT Securities Corp
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| VNDIRECT Securities Corp |
BaoMinh Insurance and VNDIRECT Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and VNDIRECT Securities
The main advantage of trading using opposite BaoMinh Insurance and VNDIRECT Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, VNDIRECT Securities 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 VNDIRECT Securities will offset losses from the drop in VNDIRECT Securities' 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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