Correlation Between Materials Petroleum and VINACONEX
Can any of the company-specific risk be diversified away by investing in both Materials Petroleum and VINACONEX 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 Materials Petroleum and VINACONEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materials Petroleum JSC and VINACONEX 21, you can compare the effects of market volatilities on Materials Petroleum and VINACONEX 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 Materials Petroleum with a short position of VINACONEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materials Petroleum and VINACONEX.
Diversification Opportunities for Materials Petroleum and VINACONEX
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Materials and VINACONEX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Materials Petroleum JSC and VINACONEX 21 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VINACONEX 21 and Materials Petroleum 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 Materials Petroleum JSC are associated (or correlated) with VINACONEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VINACONEX 21 has no effect on the direction of Materials Petroleum i.e., Materials Petroleum and VINACONEX go up and down completely randomly.
Pair Corralation between Materials Petroleum and VINACONEX
Assuming the 90 days trading horizon Materials Petroleum is expected to generate 10.04 times less return on investment than VINACONEX. In addition to that, Materials Petroleum is 1.17 times more volatile than VINACONEX 21. It trades about 0.02 of its total potential returns per unit of risk. VINACONEX 21 is currently generating about 0.26 per unit of volatility. If you would invest 570,000 in VINACONEX 21 on September 5, 2024 and sell it today you would earn a total of 100,000 from holding VINACONEX 21 or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Materials Petroleum JSC vs. VINACONEX 21
Performance |
| Timeline |
| Materials Petroleum JSC |
| VINACONEX 21 |
Materials Petroleum and VINACONEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materials Petroleum and VINACONEX
The main advantage of trading using opposite Materials Petroleum and VINACONEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materials Petroleum position performs unexpectedly, VINACONEX 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 VINACONEX will offset losses from the drop in VINACONEX's long position.| Materials Petroleum vs. FIT INVEST JSC | Materials Petroleum vs. Damsan JSC | Materials Petroleum vs. An Phat Plastic | Materials Petroleum vs. Alphanam ME |
| VINACONEX vs. Alphanam ME | VINACONEX vs. Hochiminh City Metal | VINACONEX vs. Atesco Industrial Cartering | VINACONEX vs. Danang Education 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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