Correlation Between FIT INVEST and Petrovietnam Technical
Can any of the company-specific risk be diversified away by investing in both FIT INVEST 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 FIT INVEST and Petrovietnam Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIT INVEST JSC and Petrovietnam Technical Services, you can compare the effects of market volatilities on FIT INVEST 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 FIT INVEST with a short position of Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Petrovietnam Technical.
Diversification Opportunities for FIT INVEST and Petrovietnam Technical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FIT and Petrovietnam is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical and FIT INVEST 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 FIT INVEST JSC 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 FIT INVEST i.e., FIT INVEST and Petrovietnam Technical go up and down completely randomly.
Pair Corralation between FIT INVEST and Petrovietnam Technical
Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the Petrovietnam Technical. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 2.01 times less risky than Petrovietnam Technical. The stock trades about -0.31 of its potential returns per unit of risk. The Petrovietnam Technical Services is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 3,380,000 in Petrovietnam Technical Services on November 3, 2024 and sell it today you would lose (80,000) from holding Petrovietnam Technical Services or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIT INVEST JSC vs. Petrovietnam Technical Service
Performance |
| Timeline |
| FIT INVEST JSC |
| Petrovietnam Technical |
FIT INVEST and Petrovietnam Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Petrovietnam Technical
The main advantage of trading using opposite FIT INVEST and Petrovietnam Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST 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.| FIT INVEST vs. Nafoods Group JSC | FIT INVEST vs. Dong A Hotel | FIT INVEST vs. Military Insurance Corp | FIT INVEST vs. Vietnam Airlines JSC |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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