Correlation Between Hochiminh City and Petrolimex Information
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Petrolimex Information 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 Hochiminh City and Petrolimex Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hochiminh City Metal and Petrolimex Information Technology, you can compare the effects of market volatilities on Hochiminh City and Petrolimex Information 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 Hochiminh City with a short position of Petrolimex Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Petrolimex Information.
Diversification Opportunities for Hochiminh City and Petrolimex Information
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochiminh and Petrolimex is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Petrolimex Information Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Information and Hochiminh City 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 Hochiminh City Metal are associated (or correlated) with Petrolimex Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Information has no effect on the direction of Hochiminh City i.e., Hochiminh City and Petrolimex Information go up and down completely randomly.
Pair Corralation between Hochiminh City and Petrolimex Information
Assuming the 90 days trading horizon Hochiminh City is expected to generate 3.42 times less return on investment than Petrolimex Information. But when comparing it to its historical volatility, Hochiminh City Metal is 3.7 times less risky than Petrolimex Information. It trades about 0.04 of its potential returns per unit of risk. Petrolimex Information Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,306,358 in Petrolimex Information Technology on August 31, 2024 and sell it today you would earn a total of 383,642 from holding Petrolimex Information Technology or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 56.85% |
| Values | Daily Returns |
Hochiminh City Metal vs. Petrolimex Information Technol
Performance |
| Timeline |
| Hochiminh City Metal |
| Petrolimex Information |
Hochiminh City and Petrolimex Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Petrolimex Information
The main advantage of trading using opposite Hochiminh City and Petrolimex Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Petrolimex Information 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 Information will offset losses from the drop in Petrolimex Information's long position.| Hochiminh City vs. VTC Telecommunications JSC | Hochiminh City vs. DOMESCO Medical Import | Hochiminh City vs. Elcom Technology Communications | Hochiminh City vs. Tri Viet Management |
| Petrolimex Information vs. Song Hong Garment | Petrolimex Information vs. Alphanam ME | Petrolimex Information vs. Hochiminh City Metal | Petrolimex Information vs. Atesco Industrial Cartering |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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