Correlation Between Kinh Bac and Materials Petroleum
Can any of the company-specific risk be diversified away by investing in both Kinh Bac and Materials Petroleum 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 Kinh Bac and Materials Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinh Bac City and Materials Petroleum JSC, you can compare the effects of market volatilities on Kinh Bac and Materials Petroleum 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 Kinh Bac with a short position of Materials Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinh Bac and Materials Petroleum.
Diversification Opportunities for Kinh Bac and Materials Petroleum
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinh and Materials is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kinh Bac City and Materials Petroleum JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Petroleum JSC and Kinh Bac 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 Kinh Bac City are associated (or correlated) with Materials Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Petroleum JSC has no effect on the direction of Kinh Bac i.e., Kinh Bac and Materials Petroleum go up and down completely randomly.
Pair Corralation between Kinh Bac and Materials Petroleum
Assuming the 90 days trading horizon Kinh Bac City is expected to under-perform the Materials Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Kinh Bac City is 2.32 times less risky than Materials Petroleum. The stock trades about -0.04 of its potential returns per unit of risk. The Materials Petroleum JSC is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,100,000 in Materials Petroleum JSC on September 3, 2024 and sell it today you would lose (330,000) from holding Materials Petroleum JSC or give up 10.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.93% |
| Values | Daily Returns |
Kinh Bac City vs. Materials Petroleum JSC
Performance |
| Timeline |
| Kinh Bac City |
| Materials Petroleum JSC |
Kinh Bac and Materials Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinh Bac and Materials Petroleum
The main advantage of trading using opposite Kinh Bac and Materials Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinh Bac position performs unexpectedly, Materials Petroleum 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 Materials Petroleum will offset losses from the drop in Materials Petroleum's long position.| Kinh Bac vs. FIT INVEST JSC | Kinh Bac vs. Damsan JSC | Kinh Bac vs. An Phat Plastic | Kinh Bac vs. Alphanam ME |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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