Correlation Between Petrolimex Petrochemical and BIDV Insurance
Can any of the company-specific risk be diversified away by investing in both Petrolimex Petrochemical 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 Petrochemical 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 Petrochemical JSC and BIDV Insurance Corp, you can compare the effects of market volatilities on Petrolimex Petrochemical 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 Petrochemical with a short position of BIDV Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Petrochemical and BIDV Insurance.
Diversification Opportunities for Petrolimex Petrochemical and BIDV Insurance
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Petrolimex and BIDV is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Petrochemical 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 Petrolimex Petrochemical 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 Petrochemical 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 Petrolimex Petrochemical i.e., Petrolimex Petrochemical and BIDV Insurance go up and down completely randomly.
Pair Corralation between Petrolimex Petrochemical and BIDV Insurance
Assuming the 90 days trading horizon Petrolimex Petrochemical JSC is expected to under-perform the BIDV Insurance. In addition to that, Petrolimex Petrochemical is 1.23 times more volatile than BIDV Insurance Corp. It trades about -0.06 of its total potential returns per unit of risk. BIDV Insurance Corp is currently generating about 0.05 per unit of volatility. If you would invest 2,563,608 in BIDV Insurance Corp on August 31, 2024 and sell it today you would earn a total of 746,392 from holding BIDV Insurance Corp or generate 29.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrolimex Petrochemical JSC vs. BIDV Insurance Corp
Performance |
| Timeline |
| Petrolimex Petrochemical |
| BIDV Insurance Corp |
Petrolimex Petrochemical and BIDV Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Petrochemical and BIDV Insurance
The main advantage of trading using opposite Petrolimex Petrochemical and BIDV Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Petrochemical 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 Petrochemical vs. Pha Le Plastics | Petrolimex Petrochemical vs. TDG Global Investment | Petrolimex Petrochemical vs. HUD1 Investment and | Petrolimex Petrochemical vs. Materials Petroleum JSC |
| 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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