Correlation Between Ducgiang Chemicals and BaoMinh Insurance
Can any of the company-specific risk be diversified away by investing in both Ducgiang Chemicals 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 Ducgiang Chemicals and BaoMinh Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ducgiang Chemicals Detergent and BaoMinh Insurance Corp, you can compare the effects of market volatilities on Ducgiang Chemicals 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 Ducgiang Chemicals with a short position of BaoMinh Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ducgiang Chemicals and BaoMinh Insurance.
Diversification Opportunities for Ducgiang Chemicals and BaoMinh Insurance
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ducgiang and BaoMinh is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ducgiang Chemicals Detergent 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent 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 Ducgiang Chemicals i.e., Ducgiang Chemicals and BaoMinh Insurance go up and down completely randomly.
Pair Corralation between Ducgiang Chemicals and BaoMinh Insurance
Assuming the 90 days trading horizon Ducgiang Chemicals Detergent is expected to generate 1.36 times more return on investment than BaoMinh Insurance. However, Ducgiang Chemicals is 1.36 times more volatile than BaoMinh Insurance Corp. It trades about 0.14 of its potential returns per unit of risk. BaoMinh Insurance Corp is currently generating about -0.04 per unit of risk. If you would invest 10,756,600 in Ducgiang Chemicals Detergent on August 25, 2024 and sell it today you would earn a total of 643,400 from holding Ducgiang Chemicals Detergent or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ducgiang Chemicals Detergent vs. BaoMinh Insurance Corp
Performance |
| Timeline |
| Ducgiang Chemicals |
| BaoMinh Insurance Corp |
Ducgiang Chemicals and BaoMinh Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ducgiang Chemicals and BaoMinh Insurance
The main advantage of trading using opposite Ducgiang Chemicals and BaoMinh Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ducgiang Chemicals 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.| Ducgiang Chemicals vs. Tay Ninh Rubber | Ducgiang Chemicals vs. Hochiminh City Metal | Ducgiang Chemicals vs. RangDong Plastic JSC | Ducgiang Chemicals vs. Phuoc Hoa Rubber |
| BaoMinh Insurance vs. FIT INVEST JSC | BaoMinh Insurance vs. Damsan JSC | BaoMinh Insurance vs. An Phat Plastic | BaoMinh Insurance vs. APG Securities Joint |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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