Correlation Between Taseco Air and PetroVietnam Transportation
Can any of the company-specific risk be diversified away by investing in both Taseco Air 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 Taseco Air and PetroVietnam Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taseco Air Services and PetroVietnam Transportation Corp, you can compare the effects of market volatilities on Taseco Air 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 Taseco Air with a short position of PetroVietnam Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taseco Air and PetroVietnam Transportation.
Diversification Opportunities for Taseco Air and PetroVietnam Transportation
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taseco and PetroVietnam is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Taseco Air Services and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and Taseco Air 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 Taseco Air Services 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 Taseco Air i.e., Taseco Air and PetroVietnam Transportation go up and down completely randomly.
Pair Corralation between Taseco Air and PetroVietnam Transportation
Assuming the 90 days trading horizon Taseco Air Services is expected to generate 0.68 times more return on investment than PetroVietnam Transportation. However, Taseco Air Services is 1.47 times less risky than PetroVietnam Transportation. It trades about -0.15 of its potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.22 per unit of risk. If you would invest 5,500,000 in Taseco Air Services on October 28, 2024 and sell it today you would lose (150,000) from holding Taseco Air Services or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taseco Air Services vs. PetroVietnam Transportation Co
Performance |
| Timeline |
| Taseco Air Services |
| PetroVietnam Transportation |
Taseco Air and PetroVietnam Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taseco Air and PetroVietnam Transportation
The main advantage of trading using opposite Taseco Air and PetroVietnam Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taseco Air 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.| Taseco Air vs. FIT INVEST JSC | Taseco Air vs. Damsan JSC | Taseco Air vs. An Phat Plastic | Taseco Air vs. APG Securities Joint |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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