Correlation Between Japan Vietnam and BIDV Securities
Can any of the company-specific risk be diversified away by investing in both Japan Vietnam 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 Japan Vietnam and BIDV Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Vietnam Medical and BIDV Securities JSC, you can compare the effects of market volatilities on Japan Vietnam 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 Japan Vietnam with a short position of BIDV Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Vietnam and BIDV Securities.
Diversification Opportunities for Japan Vietnam and BIDV Securities
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Japan and BIDV is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Japan Vietnam Medical 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 Japan Vietnam 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 Japan Vietnam Medical 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 Japan Vietnam i.e., Japan Vietnam and BIDV Securities go up and down completely randomly.
Pair Corralation between Japan Vietnam and BIDV Securities
Assuming the 90 days trading horizon Japan Vietnam Medical is expected to under-perform the BIDV Securities. But the stock apears to be less risky and, when comparing its historical volatility, Japan Vietnam Medical is 40.65 times less risky than BIDV Securities. The stock trades about -0.04 of its potential returns per unit of risk. The BIDV Securities JSC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 14,979,600 in BIDV Securities JSC on September 12, 2024 and sell it today you would lose (10,229,600) from holding BIDV Securities JSC or give up 68.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.87% |
| Values | Daily Returns |
Japan Vietnam Medical vs. BIDV Securities JSC
Performance |
| Timeline |
| Japan Vietnam Medical |
| BIDV Securities JSC |
Japan Vietnam and BIDV Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Vietnam and BIDV Securities
The main advantage of trading using opposite Japan Vietnam and BIDV Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Vietnam 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.| Japan Vietnam vs. FIT INVEST JSC | Japan Vietnam vs. Damsan JSC | Japan Vietnam vs. An Phat Plastic | Japan Vietnam vs. Alphanam ME |
| BIDV Securities vs. Song Hong Garment | BIDV Securities vs. Alphanam ME | BIDV Securities vs. Hochiminh City Metal | BIDV Securities vs. Atesco Industrial Cartering |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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