Correlation Between Bao Ngoc and Idico JSC
Can any of the company-specific risk be diversified away by investing in both Bao Ngoc and Idico JSC 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 Bao Ngoc and Idico JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bao Ngoc Investment and Idico JSC, you can compare the effects of market volatilities on Bao Ngoc and Idico JSC 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 Bao Ngoc with a short position of Idico JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bao Ngoc and Idico JSC.
Diversification Opportunities for Bao Ngoc and Idico JSC
Poor diversification
The 3 months correlation between Bao and Idico is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bao Ngoc Investment and Idico JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idico JSC and Bao Ngoc 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 Bao Ngoc Investment are associated (or correlated) with Idico JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idico JSC has no effect on the direction of Bao Ngoc i.e., Bao Ngoc and Idico JSC go up and down completely randomly.
Pair Corralation between Bao Ngoc and Idico JSC
Assuming the 90 days trading horizon Bao Ngoc Investment is expected to generate 1.85 times more return on investment than Idico JSC. However, Bao Ngoc is 1.85 times more volatile than Idico JSC. It trades about 0.04 of its potential returns per unit of risk. Idico JSC is currently generating about -0.03 per unit of risk. If you would invest 944,000 in Bao Ngoc Investment on September 2, 2024 and sell it today you would earn a total of 16,000 from holding Bao Ngoc Investment or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bao Ngoc Investment vs. Idico JSC
Performance |
| Timeline |
| Bao Ngoc Investment |
| Idico JSC |
Bao Ngoc and Idico JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bao Ngoc and Idico JSC
The main advantage of trading using opposite Bao Ngoc and Idico JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bao Ngoc position performs unexpectedly, Idico JSC 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 Idico JSC will offset losses from the drop in Idico JSC's long position.| Bao Ngoc vs. Innovative Technology Development | Bao Ngoc vs. Saigon Viendong Technology | Bao Ngoc vs. Petrovietnam Drilling Mud | Bao Ngoc vs. Construction And Investment |
| Idico JSC vs. MST Investment JSC | Idico JSC vs. Ha Long Investment | Idico JSC vs. HUD1 Investment and | Idico JSC vs. Pacific Petroleum Transportation |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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