Correlation Between BaoMinh Insurance and BIDV Insurance

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

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

Diversification Opportunities for BaoMinh Insurance and BIDV Insurance

-0.4

Correlation Coefficient

BaoMinh Insurance  BIDV Insurance

Very good diversification

The 3 months correlation between BaoMinh and BIDV is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and BIDV Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIDV Insurance Corp and BaoMinh 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 BaoMinh Insurance Corp are associated (or correlated) with BIDV Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIDV Insurance Corp has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and BIDV Insurance go up and down completely randomly.

Pair Corralation between BaoMinh Insurance and BIDV Insurance

Assuming the 90 days trading horizon BaoMinh Insurance is expected to generate 14.23 times less return on investment than BIDV Insurance. But when comparing it to its historical volatility, BaoMinh Insurance Corp is 1.06 times less risky than BIDV Insurance. It trades about 0.0 of its potential returns per unit of risk. BIDV Insurance Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,609,062  in BIDV Insurance Corp on May 7, 2025 and sell it today you would earn a total of  1,460,938  from holding BIDV Insurance Corp or generate 55.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BaoMinh Insurance Corp  vs.  BIDV Insurance Corp

BaoMinh Insurance Corp

Risk-Adjusted Performance

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.

BIDV Insurance Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BIDV Insurance Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, BIDV Insurance displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BaoMinh Insurance and BIDV Insurance

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

The idea behind BaoMinh Insurance Corp and BIDV 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.