Correlation Between BIDV Insurance and HUD1 Investment
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and HUD1 Investment 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 HUD1 Investment 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 HUD1 Investment and, you can compare the effects of market volatilities on BIDV Insurance and HUD1 Investment 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 HUD1 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and HUD1 Investment.
Diversification Opportunities for BIDV Insurance and HUD1 Investment
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BIDV and HUD1 is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and HUD1 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUD1 Investment 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 HUD1 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUD1 Investment has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and HUD1 Investment go up and down completely randomly.
Pair Corralation between BIDV Insurance and HUD1 Investment
Assuming the 90 days trading horizon BIDV Insurance Corp is expected to generate 0.28 times more return on investment than HUD1 Investment. However, BIDV Insurance Corp is 3.54 times less risky than HUD1 Investment. It trades about 0.06 of its potential returns per unit of risk. HUD1 Investment and is currently generating about 0.01 per unit of risk. If you would invest 3,490,000 in BIDV Insurance Corp on December 3, 2024 and sell it today you would earn a total of 145,000 from holding BIDV Insurance Corp or generate 4.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 62.71% |
Values | Daily Returns |
BIDV Insurance Corp vs. HUD1 Investment and
Performance |
Timeline |
BIDV Insurance Corp |
HUD1 Investment |
BIDV Insurance and HUD1 Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BIDV Insurance and HUD1 Investment
The main advantage of trading using opposite BIDV Insurance and HUD1 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, HUD1 Investment 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 HUD1 Investment will offset losses from the drop in HUD1 Investment's long position.BIDV Insurance vs. Binh Minh Plastics | BIDV Insurance vs. Transport and Industry | BIDV Insurance vs. Viet Thanh Plastic | BIDV Insurance vs. Southern Rubber Industry |
HUD1 Investment vs. Transport and Industry | HUD1 Investment vs. PetroVietnam Transportation Corp | HUD1 Investment vs. Vietnam Petroleum Transport | HUD1 Investment vs. South Books Educational |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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