Correlation Between Military Insurance and Viet Thanh
Can any of the company-specific risk be diversified away by investing in both Military Insurance and Viet 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 Viet 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 Viet Thanh Plastic, you can compare the effects of market volatilities on Military Insurance and Viet 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 Viet Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Viet Thanh.
Diversification Opportunities for Military Insurance and Viet Thanh
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Military and Viet is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and Viet Thanh Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Thanh Plastic 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 Viet Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Thanh Plastic has no effect on the direction of Military Insurance i.e., Military Insurance and Viet Thanh go up and down completely randomly.
Pair Corralation between Military Insurance and Viet Thanh
Assuming the 90 days trading horizon Military Insurance is expected to generate 11.65 times less return on investment than Viet Thanh. But when comparing it to its historical volatility, Military Insurance Corp is 1.12 times less risky than Viet Thanh. It trades about 0.01 of its potential returns per unit of risk. Viet Thanh Plastic is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 810,000 in Viet Thanh Plastic on November 8, 2024 and sell it today you would earn a total of 960,000 from holding Viet Thanh Plastic or generate 118.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Military Insurance Corp vs. Viet Thanh Plastic
Performance |
| Timeline |
| Military Insurance Corp |
| Viet Thanh Plastic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Military Insurance and Viet Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and Viet Thanh
The main advantage of trading using opposite Military Insurance and Viet Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, Viet 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 Viet Thanh will offset losses from the drop in Viet 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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