Correlation Between Bao Ngoc and PV2 Investment
Can any of the company-specific risk be diversified away by investing in both Bao Ngoc and PV2 Investment 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 Bao Ngoc and PV2 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bao Ngoc Investment and PV2 Investment JSC, you can compare the effects of market volatilities on Bao Ngoc and PV2 Investment 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 Bao Ngoc with a short position of PV2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bao Ngoc and PV2 Investment.
Diversification Opportunities for Bao Ngoc and PV2 Investment
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bao and PV2 is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bao Ngoc Investment and PV2 Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PV2 Investment JSC and Bao Ngoc 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 Bao Ngoc Investment are associated (or correlated) with PV2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PV2 Investment JSC has no effect on the direction of Bao Ngoc i.e., Bao Ngoc and PV2 Investment go up and down completely randomly.
Pair Corralation between Bao Ngoc and PV2 Investment
Assuming the 90 days trading horizon Bao Ngoc is expected to generate 6.53 times less return on investment than PV2 Investment. But when comparing it to its historical volatility, Bao Ngoc Investment is 1.39 times less risky than PV2 Investment. It trades about 0.01 of its potential returns per unit of risk. PV2 Investment JSC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 270,000 in PV2 Investment JSC on December 12, 2024 and sell it today you would earn a total of 90,000 from holding PV2 Investment JSC or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bao Ngoc Investment vs. PV2 Investment JSC
Performance |
| Timeline |
| Bao Ngoc Investment |
| PV2 Investment JSC |
Bao Ngoc and PV2 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bao Ngoc and PV2 Investment
The main advantage of trading using opposite Bao Ngoc and PV2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bao Ngoc position performs unexpectedly, PV2 Investment 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 PV2 Investment will offset losses from the drop in PV2 Investment's long position.| Bao Ngoc vs. Transimex Transportation JSC | ||
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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