Correlation Between BIDV Insurance and Kien Giang

Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Kien Giang 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 BIDV Insurance and Kien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BIDV Insurance Corp and Kien Giang Construction, you can compare the effects of market volatilities on BIDV Insurance and Kien Giang 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 BIDV Insurance with a short position of Kien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Kien Giang.

Diversification Opportunities for BIDV Insurance and Kien Giang

-0.74

Correlation Coefficient

BIDV Insurance  Kien Giang

Pay attention - limited upside

The 3 months correlation between BIDV and Kien is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Kien Giang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kien Giang Construction and BIDV 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 BIDV Insurance Corp are associated (or correlated) with Kien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kien Giang Construction has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Kien Giang go up and down completely randomly.

Pair Corralation between BIDV Insurance and Kien Giang

Assuming the 90 days trading horizon BIDV Insurance Corp is expected to under-perform the Kien Giang. But the stock apears to be less risky and, when comparing its historical volatility, BIDV Insurance Corp is 1.29 times less risky than Kien Giang. The stock trades about -0.12 of its potential returns per unit of risk. The Kien Giang Construction is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,280,000  in Kien Giang Construction on October 11, 2024 and sell it today you would lose (50,000) from holding Kien Giang Construction or give up 2.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BIDV Insurance Corp  vs.  Kien Giang Construction

BIDV Insurance Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BIDV Insurance Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, BIDV Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kien Giang Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kien Giang Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with BIDV Insurance and Kien Giang

The main advantage of trading using opposite BIDV Insurance and Kien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Kien Giang 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 Kien Giang will offset losses from the drop in Kien Giang's long position.

The idea behind BIDV Insurance Corp and Kien Giang Construction pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.