Correlation Between Military Insurance and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Military Insurance and Ben Thanh 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 Military Insurance and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Military Insurance Corp and Ben Thanh Rubber, you can compare the effects of market volatilities on Military Insurance and Ben Thanh 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 Military Insurance with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Ben Thanh.
Diversification Opportunities for Military Insurance and Ben Thanh
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Military and Ben is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and Ben Thanh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ben Thanh Rubber and Military Insurance 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 Military Insurance Corp are associated (or correlated) with Ben Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ben Thanh Rubber has no effect on the direction of Military Insurance i.e., Military Insurance and Ben Thanh go up and down completely randomly.
Pair Corralation between Military Insurance and Ben Thanh
Assuming the 90 days trading horizon Military Insurance is expected to generate 2.66 times less return on investment than Ben Thanh. In addition to that, Military Insurance is 1.42 times more volatile than Ben Thanh Rubber. It trades about 0.01 of its total potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.05 per unit of volatility. If you would invest 1,216,286 in Ben Thanh Rubber on November 8, 2024 and sell it today you would earn a total of 218,714 from holding Ben Thanh Rubber or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.77% |
| Values | Daily Returns |
Military Insurance Corp vs. Ben Thanh Rubber
Performance |
| Timeline |
| Military Insurance Corp |
| Ben Thanh Rubber |
Military Insurance and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and Ben Thanh
The main advantage of trading using opposite Military Insurance and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, Ben Thanh 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 Ben Thanh will offset losses from the drop in Ben Thanh's long position.| Military Insurance vs. Ha Long Investment | Military Insurance vs. International Development Investment | Military Insurance vs. Mobile World Investment | Military Insurance vs. Transport and Industry |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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