Correlation Between Vincom Retail and BaoMinh Insurance
Can any of the company-specific risk be diversified away by investing in both Vincom Retail 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 Vincom Retail and BaoMinh Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vincom Retail JSC and BaoMinh Insurance Corp, you can compare the effects of market volatilities on Vincom Retail 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 Vincom Retail with a short position of BaoMinh Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vincom Retail and BaoMinh Insurance.
Diversification Opportunities for Vincom Retail and BaoMinh Insurance
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vincom and BaoMinh is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail JSC 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 Vincom Retail 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 Vincom Retail JSC 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 Vincom Retail i.e., Vincom Retail and BaoMinh Insurance go up and down completely randomly.
Pair Corralation between Vincom Retail and BaoMinh Insurance
Assuming the 90 days trading horizon Vincom Retail JSC is expected to under-perform the BaoMinh Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Vincom Retail JSC is 1.15 times less risky than BaoMinh Insurance. The stock trades about -0.19 of its potential returns per unit of risk. The BaoMinh Insurance Corp is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 2,110,000 in BaoMinh Insurance Corp on November 3, 2024 and sell it today you would lose (55,000) from holding BaoMinh Insurance Corp or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vincom Retail JSC vs. BaoMinh Insurance Corp
Performance |
| Timeline |
| Vincom Retail JSC |
| BaoMinh Insurance Corp |
Vincom Retail and BaoMinh Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vincom Retail and BaoMinh Insurance
The main advantage of trading using opposite Vincom Retail and BaoMinh Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vincom Retail 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.| Vincom Retail vs. Hanoi Beer Alcohol | Vincom Retail vs. Asia Commercial Bank | Vincom Retail vs. PostTelecommunication Equipment | Vincom Retail vs. PetroVietnam Transportation Corp |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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