Correlation Between Construction and BIDV Insurance
Can any of the company-specific risk be diversified away by investing in both Construction 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 Construction and BIDV Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Construction And Investment and BIDV Insurance Corp, you can compare the effects of market volatilities on Construction 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 Construction with a short position of BIDV Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and BIDV Insurance.
Diversification Opportunities for Construction and BIDV Insurance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Construction and BIDV is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment 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 Construction 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 Construction And Investment 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 Construction i.e., Construction and BIDV Insurance go up and down completely randomly.
Pair Corralation between Construction and BIDV Insurance
Assuming the 90 days trading horizon Construction And Investment is expected to under-perform the BIDV Insurance. In addition to that, Construction is 1.36 times more volatile than BIDV Insurance Corp. It trades about -0.08 of its total potential returns per unit of risk. BIDV Insurance Corp is currently generating about -0.09 per unit of volatility. If you would invest 3,485,000 in BIDV Insurance Corp on October 30, 2024 and sell it today you would lose (130,000) from holding BIDV Insurance Corp or give up 3.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Construction And Investment vs. BIDV Insurance Corp
Performance |
| Timeline |
| Construction And Inv |
| BIDV Insurance Corp |
Construction and BIDV Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction and BIDV Insurance
The main advantage of trading using opposite Construction and BIDV Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction 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.| Construction vs. HUD1 Investment and | Construction vs. South Basic Chemicals | Construction vs. Petrolimex Petrochemical JSC | Construction vs. 577 Investment Corp |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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