Correlation Between BIDV Insurance and Vietnam National
Can any of the company-specific risk be diversified away by investing in both BIDV Insurance and Vietnam National 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 Vietnam National 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 Vietnam National Reinsurance, you can compare the effects of market volatilities on BIDV Insurance and Vietnam National 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 Vietnam National. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIDV Insurance and Vietnam National.
Diversification Opportunities for BIDV Insurance and Vietnam National
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BIDV and Vietnam is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BIDV Insurance Corp and Vietnam National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam National Rei 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 Vietnam National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam National Rei has no effect on the direction of BIDV Insurance i.e., BIDV Insurance and Vietnam National go up and down completely randomly.
Pair Corralation between BIDV Insurance and Vietnam National
Assuming the 90 days trading horizon BIDV Insurance is expected to generate 1.35 times less return on investment than Vietnam National. But when comparing it to its historical volatility, BIDV Insurance Corp is 1.14 times less risky than Vietnam National. It trades about 0.19 of its potential returns per unit of risk. Vietnam National Reinsurance is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,190,000 in Vietnam National Reinsurance on December 5, 2024 and sell it today you would earn a total of 300,000 from holding Vietnam National Reinsurance or generate 13.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
BIDV Insurance Corp vs. Vietnam National Reinsurance
Performance |
Timeline |
BIDV Insurance Corp |
Vietnam National Rei |
BIDV Insurance and Vietnam National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BIDV Insurance and Vietnam National
The main advantage of trading using opposite BIDV Insurance and Vietnam National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIDV Insurance position performs unexpectedly, Vietnam National 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 Vietnam National will offset losses from the drop in Vietnam National's long position.BIDV Insurance vs. Vietnam Petroleum Transport | BIDV Insurance vs. Transimex Transportation JSC | BIDV Insurance vs. HVC Investment and | BIDV Insurance vs. Travel Investment and |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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