Correlation Between Vietnam Petroleum and BaoMinh Insurance
Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and BaoMinh 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 Vietnam Petroleum and BaoMinh Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Petroleum Transport and BaoMinh Insurance Corp, you can compare the effects of market volatilities on Vietnam Petroleum and BaoMinh 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 Vietnam Petroleum with a short position of BaoMinh Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and BaoMinh Insurance.
Diversification Opportunities for Vietnam Petroleum and BaoMinh Insurance
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vietnam and BaoMinh is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and BaoMinh Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BaoMinh Insurance Corp and Vietnam Petroleum 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 Vietnam Petroleum Transport are associated (or correlated) with BaoMinh Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BaoMinh Insurance Corp has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and BaoMinh Insurance go up and down completely randomly.
Pair Corralation between Vietnam Petroleum and BaoMinh Insurance
Assuming the 90 days trading horizon Vietnam Petroleum Transport is expected to generate 1.05 times more return on investment than BaoMinh Insurance. However, Vietnam Petroleum is 1.05 times more volatile than BaoMinh Insurance Corp. It trades about 0.01 of its potential returns per unit of risk. BaoMinh Insurance Corp is currently generating about -0.1 per unit of risk. If you would invest 1,410,000 in Vietnam Petroleum Transport on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Vietnam Petroleum Transport or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Petroleum Transport vs. BaoMinh Insurance Corp
Performance |
| Timeline |
| Vietnam Petroleum |
| BaoMinh Insurance Corp |
Vietnam Petroleum and BaoMinh Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Petroleum and BaoMinh Insurance
The main advantage of trading using opposite Vietnam Petroleum and BaoMinh Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, BaoMinh 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 BaoMinh Insurance will offset losses from the drop in BaoMinh Insurance's long position.| Vietnam Petroleum vs. Tin Nghia Industrial | Vietnam Petroleum vs. Viettel Construction JSC | Vietnam Petroleum vs. Hung Hau Agricultural | Vietnam Petroleum vs. Nam Kim Steel |
| BaoMinh Insurance vs. Hung Hau Agricultural | BaoMinh Insurance vs. Visicons Construction and | BaoMinh Insurance vs. Da Nang Construction | BaoMinh Insurance vs. Vinhomes 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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