Correlation Between Innovative Technology and PetroVietnam Transportation
Can any of the company-specific risk be diversified away by investing in both Innovative Technology 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 Innovative Technology and PetroVietnam Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Technology Development and PetroVietnam Transportation Corp, you can compare the effects of market volatilities on Innovative Technology 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 Innovative Technology with a short position of PetroVietnam Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Technology and PetroVietnam Transportation.
Diversification Opportunities for Innovative Technology and PetroVietnam Transportation
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innovative and PetroVietnam is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Technology Developm and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and Innovative Technology 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 Innovative Technology Development 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 Innovative Technology i.e., Innovative Technology and PetroVietnam Transportation go up and down completely randomly.
Pair Corralation between Innovative Technology and PetroVietnam Transportation
Assuming the 90 days trading horizon Innovative Technology Development is expected to generate 2.02 times more return on investment than PetroVietnam Transportation. However, Innovative Technology is 2.02 times more volatile than PetroVietnam Transportation Corp. It trades about 0.22 of its potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.27 per unit of risk. If you would invest 1,300,000 in Innovative Technology Development on October 29, 2024 and sell it today you would earn a total of 140,000 from holding Innovative Technology Development or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Technology Developm vs. PetroVietnam Transportation Co
Performance |
| Timeline |
| Innovative Technology |
| PetroVietnam Transportation |
Innovative Technology and PetroVietnam Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Technology and PetroVietnam Transportation
The main advantage of trading using opposite Innovative Technology and PetroVietnam Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Technology 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.| Innovative Technology vs. Vietnam Petroleum Transport | Innovative Technology vs. VTC Telecommunications JSC | Innovative Technology vs. Hai An Transport | Innovative Technology vs. Saigon Beer Alcohol |
| PetroVietnam Transportation vs. FIT INVEST JSC | PetroVietnam Transportation vs. Damsan JSC | PetroVietnam Transportation vs. An Phat Plastic | PetroVietnam Transportation 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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