Correlation Between Vietnam Airlines and BIDV Securities
Can any of the company-specific risk be diversified away by investing in both Vietnam Airlines and BIDV Securities 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 Airlines and BIDV Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Airlines JSC and BIDV Securities JSC, you can compare the effects of market volatilities on Vietnam Airlines and BIDV Securities 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 Airlines with a short position of BIDV Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Airlines and BIDV Securities.
Diversification Opportunities for Vietnam Airlines and BIDV Securities
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vietnam and BIDV is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Airlines JSC and BIDV Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIDV Securities JSC and Vietnam Airlines 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 Airlines JSC are associated (or correlated) with BIDV Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIDV Securities JSC has no effect on the direction of Vietnam Airlines i.e., Vietnam Airlines and BIDV Securities go up and down completely randomly.
Pair Corralation between Vietnam Airlines and BIDV Securities
Assuming the 90 days trading horizon Vietnam Airlines is expected to generate 18.16 times less return on investment than BIDV Securities. But when comparing it to its historical volatility, Vietnam Airlines JSC is 22.46 times less risky than BIDV Securities. It trades about 0.07 of its potential returns per unit of risk. BIDV Securities JSC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 29,386,800 in BIDV Securities JSC on September 14, 2024 and sell it today you would lose (24,631,800) from holding BIDV Securities JSC or give up 83.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Vietnam Airlines JSC vs. BIDV Securities JSC
Performance |
| Timeline |
| Vietnam Airlines JSC |
| BIDV Securities JSC |
Vietnam Airlines and BIDV Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Airlines and BIDV Securities
The main advantage of trading using opposite Vietnam Airlines and BIDV Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Airlines position performs unexpectedly, BIDV Securities 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 Securities will offset losses from the drop in BIDV Securities' long position.| Vietnam Airlines vs. Vietnam Dairy Products | Vietnam Airlines vs. LDG Investment JSC | Vietnam Airlines vs. Petrovietnam Drilling Mud | Vietnam Airlines vs. Petrolimex Information Technology |
| BIDV Securities vs. Saigon Viendong Technology | BIDV Securities vs. TDG Global Investment | BIDV Securities vs. Vietnam Airlines JSC | BIDV Securities vs. Long An Food |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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