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
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIT and Petrovietnam is 0.43. 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 is expected to generate 4.05 times less return on investment than Petrovietnam Technical. In addition to that, FIT INVEST is 1.12 times more volatile than Petrovietnam Technical Services. It trades about 0.01 of its total potential returns per unit of risk. Petrovietnam Technical Services is currently generating about 0.05 per unit of volatility. If you would invest 2,196,228 in Petrovietnam Technical Services on September 3, 2024 and sell it today you would earn a total of 1,193,772 from holding Petrovietnam Technical Services or generate 54.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| 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. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. Alphanam ME | FIT INVEST 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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