Correlation Between Vietnam JSCmmercial and BaoMinh Insurance
Can any of the company-specific risk be diversified away by investing in both Vietnam JSCmmercial and BaoMinh 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 Vietnam JSCmmercial and BaoMinh Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam JSCmmercial Bank and BaoMinh Insurance Corp, you can compare the effects of market volatilities on Vietnam JSCmmercial and BaoMinh 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 Vietnam JSCmmercial with a short position of BaoMinh Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam JSCmmercial and BaoMinh Insurance.
Diversification Opportunities for Vietnam JSCmmercial and BaoMinh Insurance
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vietnam and BaoMinh is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam JSCmmercial Bank and BaoMinh Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BaoMinh Insurance Corp and Vietnam JSCmmercial 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 Vietnam JSCmmercial Bank are associated (or correlated) with BaoMinh Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BaoMinh Insurance Corp has no effect on the direction of Vietnam JSCmmercial i.e., Vietnam JSCmmercial and BaoMinh Insurance go up and down completely randomly.
Pair Corralation between Vietnam JSCmmercial and BaoMinh Insurance
Assuming the 90 days trading horizon Vietnam JSCmmercial Bank is expected to generate 0.99 times more return on investment than BaoMinh Insurance. However, Vietnam JSCmmercial Bank is 1.01 times less risky than BaoMinh Insurance. It trades about 0.08 of its potential returns per unit of risk. BaoMinh Insurance Corp is currently generating about 0.03 per unit of risk. If you would invest 2,690,000 in Vietnam JSCmmercial Bank on September 3, 2024 and sell it today you would earn a total of 895,000 from holding Vietnam JSCmmercial Bank or generate 33.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam JSCmmercial Bank vs. BaoMinh Insurance Corp
Performance |
| Timeline |
| Vietnam JSCmmercial Bank |
| BaoMinh Insurance Corp |
Vietnam JSCmmercial and BaoMinh Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam JSCmmercial and BaoMinh Insurance
The main advantage of trading using opposite Vietnam JSCmmercial and BaoMinh Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam JSCmmercial position performs unexpectedly, BaoMinh 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 BaoMinh Insurance will offset losses from the drop in BaoMinh Insurance's long position.| Vietnam JSCmmercial vs. FIT INVEST JSC | Vietnam JSCmmercial vs. Damsan JSC | Vietnam JSCmmercial vs. An Phat Plastic | Vietnam JSCmmercial vs. Alphanam ME |
| BaoMinh Insurance vs. FIT INVEST JSC | BaoMinh Insurance vs. Damsan JSC | BaoMinh Insurance vs. An Phat Plastic | BaoMinh Insurance 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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