Correlation Between Vietnam Airlines and PVI Reinsurance
Can any of the company-specific risk be diversified away by investing in both Vietnam Airlines and PVI Reinsurance 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 Vietnam Airlines and PVI Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Airlines JSC and PVI Reinsurance Corp, you can compare the effects of market volatilities on Vietnam Airlines and PVI Reinsurance 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 Vietnam Airlines with a short position of PVI Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Airlines and PVI Reinsurance.
Diversification Opportunities for Vietnam Airlines and PVI Reinsurance
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vietnam and PVI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Airlines JSC and PVI Reinsurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVI Reinsurance Corp and Vietnam Airlines 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 Vietnam Airlines JSC are associated (or correlated) with PVI Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVI Reinsurance Corp has no effect on the direction of Vietnam Airlines i.e., Vietnam Airlines and PVI Reinsurance go up and down completely randomly.
Pair Corralation between Vietnam Airlines and PVI Reinsurance
Assuming the 90 days trading horizon Vietnam Airlines JSC is expected to generate 0.62 times more return on investment than PVI Reinsurance. However, Vietnam Airlines JSC is 1.61 times less risky than PVI Reinsurance. It trades about 0.05 of its potential returns per unit of risk. PVI Reinsurance Corp is currently generating about 0.02 per unit of risk. If you would invest 2,720,000 in Vietnam Airlines JSC on November 5, 2024 and sell it today you would earn a total of 40,000 from holding Vietnam Airlines JSC or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.25% |
| Values | Daily Returns |
Vietnam Airlines JSC vs. PVI Reinsurance Corp
Performance |
| Timeline |
| Vietnam Airlines JSC |
| PVI Reinsurance Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Vietnam Airlines and PVI Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Airlines and PVI Reinsurance
The main advantage of trading using opposite Vietnam Airlines and PVI Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Airlines position performs unexpectedly, PVI Reinsurance 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 PVI Reinsurance will offset losses from the drop in PVI Reinsurance's long position.| Vietnam Airlines vs. MST Investment JSC | Vietnam Airlines vs. Bao Ngoc Investment | Vietnam Airlines vs. South Basic Chemicals | Vietnam Airlines vs. Tien Giang Investment |
| PVI Reinsurance vs. FIT INVEST JSC | PVI Reinsurance vs. Damsan JSC | PVI Reinsurance vs. An Phat Plastic | PVI Reinsurance 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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