Correlation Between Hochiminh City and BIDV Insurance
Can any of the company-specific risk be diversified away by investing in both Hochiminh City 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 Hochiminh City and BIDV Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hochiminh City Metal and BIDV Insurance Corp, you can compare the effects of market volatilities on Hochiminh City 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 Hochiminh City with a short position of BIDV Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and BIDV Insurance.
Diversification Opportunities for Hochiminh City and BIDV Insurance
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochiminh and BIDV is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal 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 Hochiminh City 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 Hochiminh City Metal 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 Hochiminh City i.e., Hochiminh City and BIDV Insurance go up and down completely randomly.
Pair Corralation between Hochiminh City and BIDV Insurance
Assuming the 90 days trading horizon Hochiminh City is expected to generate 1.78 times less return on investment than BIDV Insurance. But when comparing it to its historical volatility, Hochiminh City Metal is 1.27 times less risky than BIDV Insurance. It trades about 0.04 of its potential returns per unit of risk. BIDV Insurance Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,395,428 in BIDV Insurance Corp on September 2, 2024 and sell it today you would earn a total of 1,089,572 from holding BIDV Insurance Corp or generate 45.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochiminh City Metal vs. BIDV Insurance Corp
Performance |
| Timeline |
| Hochiminh City Metal |
| BIDV Insurance Corp |
Hochiminh City and BIDV Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and BIDV Insurance
The main advantage of trading using opposite Hochiminh City and BIDV Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City 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.| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City vs. Alphanam ME |
| BIDV Insurance vs. FIT INVEST JSC | BIDV Insurance vs. Damsan JSC | BIDV Insurance vs. An Phat Plastic | BIDV 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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