Correlation Between Long An and BIDV Securities
Can any of the company-specific risk be diversified away by investing in both Long An 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 Long An and BIDV Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long An Food and BIDV Securities JSC, you can compare the effects of market volatilities on Long An 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 Long An with a short position of BIDV Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long An and BIDV Securities.
Diversification Opportunities for Long An and BIDV Securities
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Long and BIDV is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Long An Food 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 Long An 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 Long An Food 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 Long An i.e., Long An and BIDV Securities go up and down completely randomly.
Pair Corralation between Long An and BIDV Securities
Assuming the 90 days trading horizon Long An Food is expected to generate 0.81 times more return on investment than BIDV Securities. However, Long An Food is 1.23 times less risky than BIDV Securities. It trades about 0.1 of its potential returns per unit of risk. BIDV Securities JSC is currently generating about -0.26 per unit of risk. If you would invest 1,755,000 in Long An Food on October 20, 2024 and sell it today you would earn a total of 40,000 from holding Long An Food or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long An Food vs. BIDV Securities JSC
Performance |
| Timeline |
| Long An Food |
| BIDV Securities JSC |
Long An and BIDV Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long An and BIDV Securities
The main advantage of trading using opposite Long An and BIDV Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long An 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.| Long An vs. Dong A Hotel | Long An vs. South Books Educational | Long An vs. Danang Education Investment | Long An vs. Tin Nghia Industrial |
| BIDV Securities vs. South Basic Chemicals | BIDV Securities vs. Ducgiang Chemicals Detergent | BIDV Securities vs. Saigon Beer Alcohol | BIDV Securities vs. Elcom Technology Communications |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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