Correlation Between BIDV Insurance and Techcom Vietnam

Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Techcom Vietnam 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 Techcom Vietnam 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 Techcom Vietnam REIT, you can compare the effects of market volatilities on BIDV Insurance and Techcom Vietnam 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 Techcom Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Techcom Vietnam.

Diversification Opportunities for BIDV Insurance and Techcom Vietnam

-0.29

Correlation Coefficient

BIDV Insurance  Techcom Vietnam

Very good diversification

The 3 months correlation between BIDV and Techcom is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Techcom Vietnam REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techcom Vietnam REIT 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 Techcom Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techcom Vietnam REIT has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Techcom Vietnam go up and down completely randomly.

Pair Corralation between BIDV Insurance and Techcom Vietnam

Assuming the 90 days trading horizon BIDV Insurance Corp is expected to generate 0.3 times more return on investment than Techcom Vietnam. However, BIDV Insurance Corp is 3.31 times less risky than Techcom Vietnam. It trades about -0.04 of its potential returns per unit of risk. Techcom Vietnam REIT is currently generating about -0.23 per unit of risk. If you would invest  3,400,000  in BIDV Insurance Corp on October 25, 2024 and sell it today you would lose (35,000) from holding BIDV Insurance Corp or give up 1.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

BIDV Insurance Corp  vs.  Techcom Vietnam REIT

BIDV Insurance Corp

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BIDV Insurance Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, BIDV Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Techcom Vietnam REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techcom Vietnam REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with BIDV Insurance and Techcom Vietnam

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

The idea behind BIDV Insurance Corp and Techcom Vietnam REIT 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..