Correlation Between PetroVietnam Transportation and Bich Chi

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

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

Diversification Opportunities for PetroVietnam Transportation and Bich Chi

-0.23

Correlation Coefficient

PetroVietnam Transportation  Bich Chi

Very good diversification

The 3 months correlation between PetroVietnam and Bich is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Bich Chi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bich Chi Food and PetroVietnam Transportation 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 PetroVietnam Transportation Corp are associated (or correlated) with Bich Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bich Chi Food has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Bich Chi go up and down completely randomly.

Pair Corralation between PetroVietnam Transportation and Bich Chi

Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to under-perform the Bich Chi. In addition to that, PetroVietnam Transportation is 3.18 times more volatile than Bich Chi Food. It trades about -0.13 of its total potential returns per unit of risk. Bich Chi Food is currently generating about -0.38 per unit of volatility. If you would invest  4,050,000  in Bich Chi Food on October 23, 2024 and sell it today you would lose (50,000) from holding Bich Chi Food or give up 1.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	35.0%
Values	Daily Returns

PetroVietnam Transportation Co  vs.  Bich Chi Food

PetroVietnam Transportation

Risk-Adjusted Performance

0 of 100

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 very healthy basic indicators, PetroVietnam Transportation is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Bich Chi Food

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Bich Chi Food has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating technical and fundamental indicators, Bich Chi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PetroVietnam Transportation and Bich Chi

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

The idea behind PetroVietnam Transportation Corp and Bich Chi Food 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.