Correlation Between DOMESCO Medical and BaoMinh Insurance
Can any of the company-specific risk be diversified away by investing in both DOMESCO Medical 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 DOMESCO Medical and BaoMinh Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DOMESCO Medical Import and BaoMinh Insurance Corp, you can compare the effects of market volatilities on DOMESCO Medical 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 DOMESCO Medical with a short position of BaoMinh Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOMESCO Medical and BaoMinh Insurance.
Diversification Opportunities for DOMESCO Medical and BaoMinh Insurance
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DOMESCO and BaoMinh is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding DOMESCO Medical Import 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 DOMESCO Medical 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 DOMESCO Medical Import 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 DOMESCO Medical i.e., DOMESCO Medical and BaoMinh Insurance go up and down completely randomly.
Pair Corralation between DOMESCO Medical and BaoMinh Insurance
Assuming the 90 days trading horizon DOMESCO Medical Import is expected to under-perform the BaoMinh Insurance. In addition to that, DOMESCO Medical is 1.02 times more volatile than BaoMinh Insurance Corp. It trades about -0.11 of its total potential returns per unit of risk. BaoMinh Insurance Corp is currently generating about -0.02 per unit of volatility. If you would invest 2,068,182 in BaoMinh Insurance Corp on August 30, 2024 and sell it today you would lose (33,182) from holding BaoMinh Insurance Corp or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.82% |
| Values | Daily Returns |
DOMESCO Medical Import vs. BaoMinh Insurance Corp
Performance |
| Timeline |
| DOMESCO Medical Import |
| BaoMinh Insurance Corp |
DOMESCO Medical and BaoMinh Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DOMESCO Medical and BaoMinh Insurance
The main advantage of trading using opposite DOMESCO Medical and BaoMinh Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOMESCO Medical 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.| DOMESCO Medical vs. FIT INVEST JSC | DOMESCO Medical vs. Damsan JSC | DOMESCO Medical vs. An Phat Plastic | DOMESCO Medical vs. APG Securities Joint |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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