Correlation Between Petrolimex Insurance and BIDV Insurance
Can any of the company-specific risk be diversified away by investing in both Petrolimex Insurance 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 Petrolimex Insurance and BIDV Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex Insurance Corp and BIDV Insurance Corp, you can compare the effects of market volatilities on Petrolimex Insurance 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 Petrolimex Insurance with a short position of BIDV Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Insurance and BIDV Insurance.
Diversification Opportunities for Petrolimex Insurance and BIDV Insurance
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Petrolimex and BIDV is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Insurance Corp 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 Petrolimex 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 Petrolimex Insurance Corp 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 Petrolimex Insurance i.e., Petrolimex Insurance and BIDV Insurance go up and down completely randomly.
Pair Corralation between Petrolimex Insurance and BIDV Insurance
Assuming the 90 days trading horizon Petrolimex Insurance Corp is expected to generate 1.18 times more return on investment than BIDV Insurance. However, Petrolimex Insurance is 1.18 times more volatile than BIDV Insurance Corp. It trades about 0.3 of its potential returns per unit of risk. BIDV Insurance Corp is currently generating about 0.18 per unit of risk. If you would invest 2,175,000 in Petrolimex Insurance Corp on September 2, 2024 and sell it today you would earn a total of 225,000 from holding Petrolimex Insurance Corp or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
Petrolimex Insurance Corp vs. BIDV Insurance Corp
Performance |
| Timeline |
| Petrolimex Insurance Corp |
| BIDV Insurance Corp |
Petrolimex Insurance and BIDV Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Insurance and BIDV Insurance
The main advantage of trading using opposite Petrolimex Insurance and BIDV Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Insurance 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.| Petrolimex Insurance vs. FIT INVEST JSC | Petrolimex Insurance vs. Damsan JSC | Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance vs. Alphanam ME |
| BIDV Insurance vs. FIT INVEST JSC | BIDV Insurance vs. Damsan JSC | BIDV Insurance vs. An Phat Plastic | BIDV Insurance vs. Alphanam ME |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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