Correlation Between Vina2 Investment and Petrolimex International

Can any of the company-specific risk be diversified away by investing in both Vina2 Investment and Petrolimex International 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 Vina2 Investment and Petrolimex International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vina2 Investment and and Petrolimex International Trading, you can compare the effects of market volatilities on Vina2 Investment and Petrolimex International 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 Vina2 Investment with a short position of Petrolimex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vina2 Investment and Petrolimex International.

Diversification Opportunities for Vina2 Investment and Petrolimex International

-0.63

Correlation Coefficient

Vina2 Investment  Petrolimex International

Excellent diversification

The 3 months correlation between Vina2 and Petrolimex is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vina2 Investment and and Petrolimex International Tradi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex International and Vina2 Investment 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 Vina2 Investment and are associated (or correlated) with Petrolimex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex International has no effect on the direction of Vina2 Investment i.e., Vina2 Investment and Petrolimex International go up and down completely randomly.

Pair Corralation between Vina2 Investment and Petrolimex International

Assuming the 90 days trading horizon Vina2 Investment and is expected to generate 0.96 times more return on investment than Petrolimex International. However, Vina2 Investment and is 1.04 times less risky than Petrolimex International. It trades about 0.01 of its potential returns per unit of risk. Petrolimex International Trading is currently generating about -0.02 per unit of risk. If you would invest  990,000  in Vina2 Investment and on September 12, 2024 and sell it today you would lose (10,000) from holding Vina2 Investment and or give up 1.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.14%
Values	Daily Returns

Vina2 Investment and  vs.  Petrolimex International Tradi

Vina2 Investment

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vina2 Investment and are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vina2 Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Petrolimex International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petrolimex International Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Petrolimex International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vina2 Investment and Petrolimex International

The main advantage of trading using opposite Vina2 Investment and Petrolimex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vina2 Investment position performs unexpectedly, Petrolimex International 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 Petrolimex International will offset losses from the drop in Petrolimex International's long position.

The idea behind Vina2 Investment and and Petrolimex International Trading 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..