Correlation Between Thanh Thai and Petrolimex Information
Can any of the company-specific risk be diversified away by investing in both Thanh Thai 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 Thanh Thai and Petrolimex Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanh Thai Group and Petrolimex Information Technology, you can compare the effects of market volatilities on Thanh Thai 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 Thanh Thai with a short position of Petrolimex Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Thai and Petrolimex Information.
Diversification Opportunities for Thanh Thai and Petrolimex Information
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thanh and Petrolimex is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Thai Group and Petrolimex Information Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Information and Thanh Thai 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 Thanh Thai Group 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 Thanh Thai i.e., Thanh Thai and Petrolimex Information go up and down completely randomly.
Pair Corralation between Thanh Thai and Petrolimex Information
Assuming the 90 days trading horizon Thanh Thai Group is expected to under-perform the Petrolimex Information. In addition to that, Thanh Thai is 1.76 times more volatile than Petrolimex Information Technology. It trades about -0.14 of its total potential returns per unit of risk. Petrolimex Information Technology is currently generating about -0.05 per unit of volatility. If you would invest 2,790,000 in Petrolimex Information Technology on August 30, 2024 and sell it today you would lose (100,000) from holding Petrolimex Information Technology or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 42.86% |
| Values | Daily Returns |
Thanh Thai Group vs. Petrolimex Information Technol
Performance |
| Timeline |
| Thanh Thai Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Petrolimex Information |
Thanh Thai and Petrolimex Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanh Thai and Petrolimex Information
The main advantage of trading using opposite Thanh Thai and Petrolimex Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanh Thai 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.| Thanh Thai vs. Petrolimex Information Technology | Thanh Thai vs. Development Investment Construction | Thanh Thai vs. Elcom Technology Communications | Thanh Thai vs. 577 Investment Corp |
| Petrolimex Information vs. PetroVietnam Transportation Corp | Petrolimex Information vs. Travel Investment and | Petrolimex Information vs. Nam Long Investment | Petrolimex Information vs. Ba Ria Thermal |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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