Correlation Between Bao Ngoc and VN Index
Can any of the company-specific risk be diversified away by investing in both Bao Ngoc and VN Index 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 VN Index 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 VN Index, you can compare the effects of market volatilities on Bao Ngoc and VN Index 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 VN Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bao Ngoc and VN Index.
Diversification Opportunities for Bao Ngoc and VN Index
Modest diversification
The 3 months correlation between Bao and VNI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bao Ngoc Investment and VN Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VN Index 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 VN Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VN Index has no effect on the direction of Bao Ngoc i.e., Bao Ngoc and VN Index go up and down completely randomly.
Pair Corralation between Bao Ngoc and VN Index
Assuming the 90 days trading horizon Bao Ngoc Investment is expected to under-perform the VN Index. In addition to that, Bao Ngoc is 4.94 times more volatile than VN Index. It trades about -0.12 of its total potential returns per unit of risk. VN Index is currently generating about 0.0 per unit of volatility. If you would invest 126,036 in VN Index on October 25, 2024 and sell it today you would lose (73.00) from holding VN Index or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bao Ngoc Investment vs. VN Index
Performance |
| Timeline |
Bao Ngoc and VN Index Volatility Contrast
Predicted Return Density |
| Returns |
Bao Ngoc Investment
Pair trading matchups for Bao Ngoc
VN Index
Pair trading matchups for VN Index
Pair Trading with Bao Ngoc and VN Index
The main advantage of trading using opposite Bao Ngoc and VN Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bao Ngoc position performs unexpectedly, VN Index 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 VN Index will offset losses from the drop in VN Index's long position.| Bao Ngoc vs. Saigon Beer Alcohol | Bao Ngoc vs. Hai An Transport | Bao Ngoc vs. Southern Rubber Industry | Bao Ngoc vs. Hanoi Plastics JSC |
| VN Index vs. Thanh Dat Investment | VN Index vs. PVI Reinsurance Corp | VN Index vs. Telecoms Informatics JSC | VN Index vs. Din Capital Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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