Correlation Between PetroVietnam Transportation and Transport
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Transport 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 Transport 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 Transport and Industry, you can compare the effects of market volatilities on PetroVietnam Transportation and Transport 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 Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Transport.
Diversification Opportunities for PetroVietnam Transportation and Transport
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PetroVietnam and Transport is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Transport and Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and Industry 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 Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport and Industry has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Transport go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Transport
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to generate 0.84 times more return on investment than Transport. However, PetroVietnam Transportation Corp is 1.19 times less risky than Transport. It trades about 0.1 of its potential returns per unit of risk. Transport and Industry is currently generating about -0.06 per unit of risk. If you would invest 2,715,000 in PetroVietnam Transportation Corp on September 25, 2024 and sell it today you would earn a total of 45,000 from holding PetroVietnam Transportation Corp or generate 1.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PetroVietnam Transportation Co vs. Transport and Industry
Performance |
Timeline |
PetroVietnam Transportation |
Transport and Industry |
PetroVietnam Transportation and Transport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroVietnam Transportation and Transport
The main advantage of trading using opposite PetroVietnam Transportation and Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Transport 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 Transport will offset losses from the drop in Transport's long position.PetroVietnam Transportation vs. FIT INVEST JSC | PetroVietnam Transportation vs. Damsan JSC | PetroVietnam Transportation vs. An Phat Plastic | PetroVietnam Transportation vs. Alphanam ME |
Transport vs. Vietnam Petroleum Transport | Transport vs. Fecon Mining JSC | Transport vs. PetroVietnam Transportation Corp | Transport vs. Sea Air Freight |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
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