Correlation Between Sao Ta and Petrolimex Insurance
Can any of the company-specific risk be diversified away by investing in both Sao Ta and Petrolimex Insurance 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 Sao Ta and Petrolimex Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Ta Foods and Petrolimex Insurance Corp, you can compare the effects of market volatilities on Sao Ta and Petrolimex Insurance 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 Sao Ta with a short position of Petrolimex Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Ta and Petrolimex Insurance.
Diversification Opportunities for Sao Ta and Petrolimex Insurance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sao and Petrolimex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sao Ta Foods and Petrolimex Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Insurance Corp and Sao Ta 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 Sao Ta Foods are associated (or correlated) with Petrolimex Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Insurance Corp has no effect on the direction of Sao Ta i.e., Sao Ta and Petrolimex Insurance go up and down completely randomly.
Pair Corralation between Sao Ta and Petrolimex Insurance
Assuming the 90 days trading horizon Sao Ta Foods is expected to generate 0.62 times more return on investment than Petrolimex Insurance. However, Sao Ta Foods is 1.62 times less risky than Petrolimex Insurance. It trades about 0.07 of its potential returns per unit of risk. Petrolimex Insurance Corp is currently generating about 0.0 per unit of risk. If you would invest 3,168,170 in Sao Ta Foods on September 5, 2024 and sell it today you would earn a total of 1,711,830 from holding Sao Ta Foods or generate 54.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 70.33% |
| Values | Daily Returns |
Sao Ta Foods vs. Petrolimex Insurance Corp
Performance |
| Timeline |
| Sao Ta Foods |
| Petrolimex Insurance Corp |
Sao Ta and Petrolimex Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sao Ta and Petrolimex Insurance
The main advantage of trading using opposite Sao Ta and Petrolimex Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Ta position performs unexpectedly, Petrolimex Insurance 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 Petrolimex Insurance will offset losses from the drop in Petrolimex Insurance's long position.| Sao Ta vs. Pha Le Plastics | Sao Ta vs. Vietnam Rubber Group | Sao Ta vs. Petrolimex Information Technology | Sao Ta vs. Viet Thanh Plastic |
| Petrolimex Insurance vs. Nafoods Group JSC | Petrolimex Insurance vs. Sao Ta Foods | Petrolimex Insurance vs. Long An Food | Petrolimex Insurance vs. Duong Hieu Trading |
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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