Correlation Between Vietnam JSCmmercial and Military Insurance
Can any of the company-specific risk be diversified away by investing in both Vietnam JSCmmercial and Military 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 Military 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 Military Insurance Corp, you can compare the effects of market volatilities on Vietnam JSCmmercial and Military 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 Military Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam JSCmmercial and Military Insurance.
Diversification Opportunities for Vietnam JSCmmercial and Military Insurance
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vietnam and Military is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam JSCmmercial Bank and Military Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Military 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 Military Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Military Insurance Corp has no effect on the direction of Vietnam JSCmmercial i.e., Vietnam JSCmmercial and Military Insurance go up and down completely randomly.
Pair Corralation between Vietnam JSCmmercial and Military Insurance
Assuming the 90 days trading horizon Vietnam JSCmmercial Bank is expected to generate 0.76 times more return on investment than Military Insurance. However, Vietnam JSCmmercial Bank is 1.32 times less risky than Military Insurance. It trades about -0.01 of its potential returns per unit of risk. Military Insurance Corp is currently generating about -0.29 per unit of risk. If you would invest 3,810,000 in Vietnam JSCmmercial Bank on November 3, 2024 and sell it today you would lose (10,000) from holding Vietnam JSCmmercial Bank or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam JSCmmercial Bank vs. Military Insurance Corp
Performance |
| Timeline |
| Vietnam JSCmmercial Bank |
| Military Insurance Corp |
Vietnam JSCmmercial and Military Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam JSCmmercial and Military Insurance
The main advantage of trading using opposite Vietnam JSCmmercial and Military Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam JSCmmercial position performs unexpectedly, Military 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 Military Insurance will offset losses from the drop in Military Insurance's long position.| Vietnam JSCmmercial vs. Telecoms Informatics JSC | Vietnam JSCmmercial vs. Tin Nghia Industrial | Vietnam JSCmmercial vs. Investment and Industrial | Vietnam JSCmmercial vs. Tienlen Steel Corp |
| Military Insurance vs. Vincom Retail JSC | Military Insurance vs. FPT Digital Retail | Military Insurance vs. PostTelecommunication Equipment | Military Insurance vs. Post and Telecommunications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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