Correlation Between BaoMinh Insurance and Vietnam National
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Vietnam National 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 Vietnam National 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 Vietnam National Reinsurance, you can compare the effects of market volatilities on BaoMinh Insurance and Vietnam National 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 Vietnam National. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Vietnam National.
Diversification Opportunities for BaoMinh Insurance and Vietnam National
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between BaoMinh and Vietnam is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Vietnam National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam National Rei 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 Vietnam National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam National Rei has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Vietnam National go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Vietnam National
Assuming the 90 days trading horizon BaoMinh Insurance is expected to generate 6.71 times less return on investment than Vietnam National. But when comparing it to its historical volatility, BaoMinh Insurance Corp is 1.07 times less risky than Vietnam National. It trades about 0.03 of its potential returns per unit of risk. Vietnam National Reinsurance is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,220,000 in Vietnam National Reinsurance on November 4, 2024 and sell it today you would earn a total of 90,000 from holding Vietnam National Reinsurance or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. Vietnam National Reinsurance
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Vietnam National Rei |
BaoMinh Insurance and Vietnam National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Vietnam National
The main advantage of trading using opposite BaoMinh Insurance and Vietnam National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Vietnam National 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 Vietnam National will offset losses from the drop in Vietnam National's long position.| BaoMinh Insurance vs. Hung Hau Agricultural | BaoMinh Insurance vs. Visicons Construction and | BaoMinh Insurance vs. Da Nang Construction | BaoMinh Insurance vs. Vinhomes JSC |
| Vietnam National vs. VTC Telecommunications JSC | Vietnam National vs. Saigon Beer Alcohol | Vietnam National vs. Bao Ngoc Investment | Vietnam National vs. Fecon Mining JSC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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