Correlation Between Petrolimex Information and BaoMinh Insurance

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

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

Diversification Opportunities for Petrolimex Information and BaoMinh Insurance

0.15

Correlation Coefficient

Petrolimex Information  BaoMinh Insurance

Average diversification

The 3 months correlation between Petrolimex and BaoMinh is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and BaoMinh Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BaoMinh Insurance Corp and Petrolimex Information 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 Petrolimex Information Technology are associated (or correlated) with BaoMinh Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BaoMinh Insurance Corp has no effect on the direction of Petrolimex Information i.e., Petrolimex Information and BaoMinh Insurance go up and down completely randomly.

Pair Corralation between Petrolimex Information and BaoMinh Insurance

If you would invest  0.00  in Petrolimex Information Technology on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Petrolimex Information Technology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Petrolimex Information Technol  vs.  BaoMinh Insurance Corp

Petrolimex Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petrolimex Information Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Petrolimex Information is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

BaoMinh Insurance Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BaoMinh Insurance Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, BaoMinh Insurance is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Petrolimex Information and BaoMinh Insurance

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

The idea behind Petrolimex Information Technology and BaoMinh Insurance Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.