Correlation Between MST Investment and BIDV Insurance
Can any of the company-specific risk be diversified away by investing in both MST Investment 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 MST Investment and BIDV Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MST Investment JSC and BIDV Insurance Corp, you can compare the effects of market volatilities on MST Investment 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 MST Investment with a short position of BIDV Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MST Investment and BIDV Insurance.
Diversification Opportunities for MST Investment and BIDV Insurance
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MST and BIDV is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding MST Investment JSC 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 MST Investment 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 MST Investment JSC 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 MST Investment i.e., MST Investment and BIDV Insurance go up and down completely randomly.
Pair Corralation between MST Investment and BIDV Insurance
Assuming the 90 days trading horizon MST Investment JSC is expected to generate 1.78 times more return on investment than BIDV Insurance. However, MST Investment is 1.78 times more volatile than BIDV Insurance Corp. It trades about 0.1 of its potential returns per unit of risk. BIDV Insurance Corp is currently generating about 0.03 per unit of risk. If you would invest 560,000 in MST Investment JSC on August 31, 2024 and sell it today you would earn a total of 30,000 from holding MST Investment JSC or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MST Investment JSC vs. BIDV Insurance Corp
Performance |
| Timeline |
| MST Investment JSC |
| BIDV Insurance Corp |
MST Investment and BIDV Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MST Investment and BIDV Insurance
The main advantage of trading using opposite MST Investment and BIDV Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MST Investment 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.| MST Investment vs. Vu Dang Investment | MST Investment vs. 577 Investment Corp | MST Investment vs. Tienlen Steel Corp | MST Investment vs. Hanoi Beer Alcohol |
| BIDV Insurance vs. MST Investment JSC | BIDV Insurance vs. HUD1 Investment and | BIDV Insurance vs. Vincom Retail JSC | BIDV Insurance vs. Everland Investment JSC |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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