Correlation Between Truong Thanh and BIDV Insurance
Can any of the company-specific risk be diversified away by investing in both Truong Thanh 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 Truong Thanh and BIDV Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truong Thanh Furniture and BIDV Insurance Corp, you can compare the effects of market volatilities on Truong Thanh 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 Truong Thanh with a short position of BIDV Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and BIDV Insurance.
Diversification Opportunities for Truong Thanh and BIDV Insurance
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Truong and BIDV is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture 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 Truong Thanh 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 Truong Thanh Furniture 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 Truong Thanh i.e., Truong Thanh and BIDV Insurance go up and down completely randomly.
Pair Corralation between Truong Thanh and BIDV Insurance
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to under-perform the BIDV Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Truong Thanh Furniture is 1.18 times less risky than BIDV Insurance. The stock trades about -0.33 of its potential returns per unit of risk. The BIDV Insurance Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 3,400,000 in BIDV Insurance Corp on November 3, 2024 and sell it today you would lose (45,000) from holding BIDV Insurance Corp or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truong Thanh Furniture vs. BIDV Insurance Corp
Performance |
| Timeline |
| Truong Thanh Furniture |
| BIDV Insurance Corp |
Truong Thanh and BIDV Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and BIDV Insurance
The main advantage of trading using opposite Truong Thanh and BIDV Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh 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.| Truong Thanh vs. Tienlen Steel Corp | Truong Thanh vs. Saigon Telecommunication Technologies | Truong Thanh vs. Petrovietnam Drilling Mud | Truong Thanh vs. SCG Construction JSC |
| BIDV Insurance vs. Petrolimex Insurance Corp | BIDV Insurance vs. Innovative Technology Development | BIDV Insurance vs. Post and Telecommunications | BIDV Insurance vs. Hai An Transport |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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