Correlation Between Mekong Fisheries and Petrovietnam Technical

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

By analyzing existing cross correlation between Mekong Fisheries JSC and Petrovietnam Technical Services, you can compare the effects of market volatilities on Mekong Fisheries and Petrovietnam Technical 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 Mekong Fisheries with a short position of Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekong Fisheries and Petrovietnam Technical.

Diversification Opportunities for Mekong Fisheries and Petrovietnam Technical

-0.1

Correlation Coefficient

Mekong Fisheries  Petrovietnam Technical

Good diversification

The 3 months correlation between Mekong and Petrovietnam is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mekong Fisheries JSC and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical and Mekong Fisheries 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 Mekong Fisheries JSC are associated (or correlated) with Petrovietnam Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrovietnam Technical has no effect on the direction of Mekong Fisheries i.e., Mekong Fisheries and Petrovietnam Technical go up and down completely randomly.

Pair Corralation between Mekong Fisheries and Petrovietnam Technical

Assuming the 90 days trading horizon Mekong Fisheries JSC is expected to under-perform the Petrovietnam Technical. In addition to that, Mekong Fisheries is 2.26 times more volatile than Petrovietnam Technical Services. It trades about 0.0 of its total potential returns per unit of risk. Petrovietnam Technical Services is currently generating about 0.59 per unit of volatility. If you would invest  3,280,000  in Petrovietnam Technical Services on December 4, 2024 and sell it today you would earn a total of  280,000  from holding Petrovietnam Technical Services or generate 8.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Mekong Fisheries JSC  vs.  Petrovietnam Technical Service

Mekong Fisheries JSC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mekong Fisheries JSC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Mekong Fisheries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Petrovietnam Technical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Petrovietnam Technical Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Petrovietnam Technical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mekong Fisheries and Petrovietnam Technical

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

The idea behind Mekong Fisheries JSC and Petrovietnam Technical Services 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.