Correlation Between IDJ FINANCIAL and PetroVietnam Transportation
Can any of the company-specific risk be diversified away by investing in both IDJ FINANCIAL and PetroVietnam Transportation 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 IDJ FINANCIAL and PetroVietnam Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDJ FINANCIAL and PetroVietnam Transportation Corp, you can compare the effects of market volatilities on IDJ FINANCIAL and PetroVietnam Transportation 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 IDJ FINANCIAL with a short position of PetroVietnam Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDJ FINANCIAL and PetroVietnam Transportation.
Diversification Opportunities for IDJ FINANCIAL and PetroVietnam Transportation
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IDJ and PetroVietnam is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and IDJ FINANCIAL 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 IDJ FINANCIAL are associated (or correlated) with PetroVietnam Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroVietnam Transportation has no effect on the direction of IDJ FINANCIAL i.e., IDJ FINANCIAL and PetroVietnam Transportation go up and down completely randomly.
Pair Corralation between IDJ FINANCIAL and PetroVietnam Transportation
Assuming the 90 days trading horizon IDJ FINANCIAL is expected to under-perform the PetroVietnam Transportation. In addition to that, IDJ FINANCIAL is 1.69 times more volatile than PetroVietnam Transportation Corp. It trades about -0.08 of its total potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.05 per unit of volatility. If you would invest 2,825,000 in PetroVietnam Transportation Corp on September 2, 2024 and sell it today you would lose (125,000) from holding PetroVietnam Transportation Corp or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
IDJ FINANCIAL vs. PetroVietnam Transportation Co
Performance |
| Timeline |
| IDJ FINANCIAL |
| PetroVietnam Transportation |
IDJ FINANCIAL and PetroVietnam Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDJ FINANCIAL and PetroVietnam Transportation
The main advantage of trading using opposite IDJ FINANCIAL and PetroVietnam Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDJ FINANCIAL position performs unexpectedly, PetroVietnam Transportation 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 Transportation will offset losses from the drop in PetroVietnam Transportation's long position.| IDJ FINANCIAL vs. FIT INVEST JSC | IDJ FINANCIAL vs. Damsan JSC | IDJ FINANCIAL vs. An Phat Plastic | IDJ FINANCIAL vs. Alphanam ME |
| PetroVietnam Transportation vs. Da Nang Construction | PetroVietnam Transportation vs. Danang Rubber JSC | PetroVietnam Transportation vs. Thong Nhat Rubber | PetroVietnam Transportation vs. Dong Nai Plastic |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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