Correlation Between South Basic and PetroVietnam Transportation
Can any of the company-specific risk be diversified away by investing in both South Basic 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 South Basic and PetroVietnam Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Basic Chemicals and PetroVietnam Transportation Corp, you can compare the effects of market volatilities on South Basic 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 South Basic with a short position of PetroVietnam Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Basic and PetroVietnam Transportation.
Diversification Opportunities for South Basic and PetroVietnam Transportation
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between South and PetroVietnam is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding South Basic Chemicals and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and South Basic 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 South Basic Chemicals 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 South Basic i.e., South Basic and PetroVietnam Transportation go up and down completely randomly.
Pair Corralation between South Basic and PetroVietnam Transportation
Assuming the 90 days trading horizon South Basic Chemicals is expected to under-perform the PetroVietnam Transportation. In addition to that, South Basic is 1.37 times more volatile than PetroVietnam Transportation Corp. It trades about -0.25 of its total potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.27 per unit of volatility. If you would invest 2,795,000 in PetroVietnam Transportation Corp on October 29, 2024 and sell it today you would lose (185,000) from holding PetroVietnam Transportation Corp or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Basic Chemicals vs. PetroVietnam Transportation Co
Performance |
| Timeline |
| South Basic Chemicals |
| PetroVietnam Transportation |
South Basic and PetroVietnam Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Basic and PetroVietnam Transportation
The main advantage of trading using opposite South Basic and PetroVietnam Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Basic 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.| South Basic vs. HUD1 Investment and | South Basic vs. Dinhvu Port Investment | South Basic vs. PV2 Investment JSC | South Basic vs. Song Hong Aluminum |
| PetroVietnam Transportation vs. FIT INVEST JSC | PetroVietnam Transportation vs. Damsan JSC | PetroVietnam Transportation vs. An Phat Plastic | PetroVietnam Transportation 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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