Correlation Between FIT INVEST and PetroVietnam Transportation

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

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

Diversification Opportunities for FIT INVEST and PetroVietnam Transportation

-0.02

Correlation Coefficient

FIT INVEST  PetroVietnam Transportation

Good diversification

The 3 months correlation between FIT and PetroVietnam is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and FIT INVEST 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 FIT INVEST JSC are associated (or correlated) with PetroVietnam Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroVietnam Transportation has no effect on the direction of FIT INVEST i.e., FIT INVEST and PetroVietnam Transportation go up and down completely randomly.

Pair Corralation between FIT INVEST and PetroVietnam Transportation

Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 1.11 times more return on investment than PetroVietnam Transportation. However, FIT INVEST is 1.11 times more volatile than PetroVietnam Transportation Corp. It trades about 0.14 of its potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.15 per unit of risk. If you would invest  421,000  in FIT INVEST JSC on December 30, 2024 and sell it today you would earn a total of  44,000  from holding FIT INVEST JSC or generate 10.45% return on investment over 90 days.

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

FIT INVEST JSC  vs.  PetroVietnam Transportation Co

FIT INVEST JSC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FIT INVEST JSC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, FIT INVEST may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PetroVietnam Transportation

Risk-Adjusted Performance

Very Weak

Over the last 90 days PetroVietnam Transportation Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with FIT INVEST and PetroVietnam Transportation

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

The idea behind FIT INVEST JSC and PetroVietnam Transportation 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.