Correlation Between PVI Reinsurance and Viettel Construction

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

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

Diversification Opportunities for PVI Reinsurance and Viettel Construction

-0.45

Correlation Coefficient

PVI Reinsurance  Viettel Construction

Very good diversification

The 3 months correlation between PVI and Viettel is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PVI Reinsurance Corp and Viettel Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viettel Construction JSC and PVI Reinsurance 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 PVI Reinsurance Corp are associated (or correlated) with Viettel Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viettel Construction JSC has no effect on the direction of PVI Reinsurance i.e., PVI Reinsurance and Viettel Construction go up and down completely randomly.

Pair Corralation between PVI Reinsurance and Viettel Construction

Assuming the 90 days trading horizon PVI Reinsurance Corp is expected to generate 1.45 times more return on investment than Viettel Construction. However, PVI Reinsurance is 1.45 times more volatile than Viettel Construction JSC. It trades about 0.09 of its potential returns per unit of risk. Viettel Construction JSC is currently generating about -0.13 per unit of risk. If you would invest  1,840,000  in PVI Reinsurance Corp on December 20, 2024 and sell it today you would earn a total of  190,000  from holding PVI Reinsurance Corp or generate 10.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.75%
Values	Daily Returns

PVI Reinsurance Corp  vs.  Viettel Construction JSC

PVI Reinsurance Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PVI Reinsurance Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, PVI Reinsurance displayed solid returns over the last few months and may actually be approaching a breakup point.

Viettel Construction JSC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viettel Construction JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PVI Reinsurance and Viettel Construction

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

The idea behind PVI Reinsurance Corp and Viettel Construction JSC 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.