Correlation Between Southern Rubber and BIDV Insurance
Can any of the company-specific risk be diversified away by investing in both Southern Rubber and BIDV Insurance 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 Southern Rubber and BIDV Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Rubber Industry and BIDV Insurance Corp, you can compare the effects of market volatilities on Southern Rubber and BIDV Insurance 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 Southern Rubber with a short position of BIDV Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Rubber and BIDV Insurance.
Diversification Opportunities for Southern Rubber and BIDV Insurance
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and BIDV is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Southern Rubber Industry and BIDV Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIDV Insurance Corp and Southern Rubber 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 Southern Rubber Industry are associated (or correlated) with BIDV Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIDV Insurance Corp has no effect on the direction of Southern Rubber i.e., Southern Rubber and BIDV Insurance go up and down completely randomly.
Pair Corralation between Southern Rubber and BIDV Insurance
Assuming the 90 days trading horizon Southern Rubber Industry is expected to generate 1.72 times more return on investment than BIDV Insurance. However, Southern Rubber is 1.72 times more volatile than BIDV Insurance Corp. It trades about 0.3 of its potential returns per unit of risk. BIDV Insurance Corp is currently generating about 0.15 per unit of risk. If you would invest 1,100,000 in Southern Rubber Industry on September 4, 2024 and sell it today you would earn a total of 240,000 from holding Southern Rubber Industry or generate 21.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Rubber Industry vs. BIDV Insurance Corp
Performance |
| Timeline |
| Southern Rubber Industry |
| BIDV Insurance Corp |
Southern Rubber and BIDV Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Rubber and BIDV Insurance
The main advantage of trading using opposite Southern Rubber and BIDV Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Rubber position performs unexpectedly, BIDV Insurance 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 BIDV Insurance will offset losses from the drop in BIDV Insurance's long position.| Southern Rubber vs. BIDV Insurance Corp | Southern Rubber vs. VietinBank Securities JSC | Southern Rubber vs. Nam Kim Steel | Southern Rubber vs. Bich Chi Food |
| BIDV Insurance vs. Saigon Viendong Technology | BIDV Insurance vs. Saigon Telecommunication Technologies | BIDV Insurance vs. BaoMinh Insurance Corp | BIDV Insurance vs. Vietnam JSCmmercial Bank |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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