Correlation Between BaoMinh Insurance and Vincom Retail
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Vincom Retail 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 Vincom Retail 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 Vincom Retail JSC, you can compare the effects of market volatilities on BaoMinh Insurance and Vincom Retail 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 Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Vincom Retail.
Diversification Opportunities for BaoMinh Insurance and Vincom Retail
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BaoMinh and Vincom is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC 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 Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Vincom Retail go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Vincom Retail
Assuming the 90 days trading horizon BaoMinh Insurance Corp is expected to generate 0.88 times more return on investment than Vincom Retail. However, BaoMinh Insurance Corp is 1.13 times less risky than Vincom Retail. It trades about 0.04 of its potential returns per unit of risk. Vincom Retail JSC 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. Vincom Retail JSC
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Vincom Retail JSC |
BaoMinh Insurance and Vincom Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Vincom Retail
The main advantage of trading using opposite BaoMinh Insurance and Vincom Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Vincom Retail 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 Vincom Retail will offset losses from the drop in Vincom Retail'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 |
| Vincom Retail vs. FIT INVEST JSC | Vincom Retail vs. Damsan JSC | Vincom Retail vs. An Phat Plastic | Vincom Retail 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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