Correlation Between Binh Minh and Petrovietnam Technical
Can any of the company-specific risk be diversified away by investing in both Binh Minh and Petrovietnam Technical 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 Binh Minh and Petrovietnam Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Minh Plastics and Petrovietnam Technical Services, you can compare the effects of market volatilities on Binh Minh and Petrovietnam Technical 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 Binh Minh with a short position of Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Minh and Petrovietnam Technical.
Diversification Opportunities for Binh Minh and Petrovietnam Technical
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Binh and Petrovietnam is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Binh Minh Plastics and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical and Binh Minh 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 Binh Minh Plastics are associated (or correlated) with Petrovietnam Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrovietnam Technical has no effect on the direction of Binh Minh i.e., Binh Minh and Petrovietnam Technical go up and down completely randomly.
Pair Corralation between Binh Minh and Petrovietnam Technical
Assuming the 90 days trading horizon Binh Minh Plastics is expected to under-perform the Petrovietnam Technical. In addition to that, Binh Minh is 1.35 times more volatile than Petrovietnam Technical Services. It trades about -0.19 of its total potential returns per unit of risk. Petrovietnam Technical Services is currently generating about -0.06 per unit of volatility. If you would invest 3,370,000 in Petrovietnam Technical Services on October 25, 2024 and sell it today you would lose (60,000) from holding Petrovietnam Technical Services or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Minh Plastics vs. Petrovietnam Technical Service
Performance |
| Timeline |
| Binh Minh Plastics |
| Petrovietnam Technical |
Binh Minh and Petrovietnam Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Minh and Petrovietnam Technical
The main advantage of trading using opposite Binh Minh and Petrovietnam Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Minh position performs unexpectedly, Petrovietnam Technical 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 Technical will offset losses from the drop in Petrovietnam Technical's long position.| Binh Minh vs. FIT INVEST JSC | Binh Minh vs. Damsan JSC | Binh Minh vs. An Phat Plastic | Binh Minh vs. APG Securities Joint |
| Petrovietnam Technical vs. FIT INVEST JSC | Petrovietnam Technical vs. Damsan JSC | Petrovietnam Technical vs. An Phat Plastic | Petrovietnam Technical 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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