Correlation Between BIDV Insurance and Vu Dang
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Vu Dang 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 Vu Dang 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 Vu Dang Investment, you can compare the effects of market volatilities on BIDV Insurance and Vu Dang 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 Vu Dang. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Vu Dang.
Diversification Opportunities for BIDV Insurance and Vu Dang
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BIDV and SVD is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Vu Dang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vu Dang 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 Vu Dang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vu Dang Investment has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Vu Dang go up and down completely randomly.
Pair Corralation between BIDV Insurance and Vu Dang
Assuming the 90 days trading horizon BIDV Insurance Corp is expected to generate 1.22 times more return on investment than Vu Dang. However, BIDV Insurance is 1.22 times more volatile than Vu Dang Investment. It trades about 0.24 of its potential returns per unit of risk. Vu Dang Investment is currently generating about 0.16 per unit of risk. If you would invest 3,400,000 in BIDV Insurance Corp on December 3, 2024 and sell it today you would earn a total of 285,000 from holding BIDV Insurance Corp or generate 8.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
BIDV Insurance Corp vs. Vu Dang Investment
Performance |
Timeline |
BIDV Insurance Corp |
Vu Dang Investment |
BIDV Insurance and Vu Dang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BIDV Insurance and Vu Dang
The main advantage of trading using opposite BIDV Insurance and Vu Dang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Vu Dang 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 Vu Dang will offset losses from the drop in Vu Dang'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 |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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