Correlation Between Mechanics Construction and Vietnam Petroleum
Can any of the company-specific risk be diversified away by investing in both Mechanics Construction and Vietnam 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 Mechanics Construction and Vietnam Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechanics Construction and and Vietnam Petroleum Transport, you can compare the effects of market volatilities on Mechanics Construction and Vietnam 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 Mechanics Construction with a short position of Vietnam Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechanics Construction and Vietnam Petroleum.
Diversification Opportunities for Mechanics Construction and Vietnam Petroleum
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mechanics and Vietnam is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Construction and and Vietnam Petroleum Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Petroleum and Mechanics Construction 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 Mechanics Construction and are associated (or correlated) with Vietnam Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Petroleum has no effect on the direction of Mechanics Construction i.e., Mechanics Construction and Vietnam Petroleum go up and down completely randomly.
Pair Corralation between Mechanics Construction and Vietnam Petroleum
Assuming the 90 days trading horizon Mechanics Construction is expected to generate 1.67 times less return on investment than Vietnam Petroleum. But when comparing it to its historical volatility, Mechanics Construction and is 1.02 times less risky than Vietnam Petroleum. It trades about 0.04 of its potential returns per unit of risk. Vietnam Petroleum Transport is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 730,800 in Vietnam Petroleum Transport on September 4, 2024 and sell it today you would earn a total of 669,200 from holding Vietnam Petroleum Transport or generate 91.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.99% |
| Values | Daily Returns |
Mechanics Construction and vs. Vietnam Petroleum Transport
Performance |
| Timeline |
| Mechanics Construction |
| Vietnam Petroleum |
Mechanics Construction and Vietnam Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechanics Construction and Vietnam Petroleum
The main advantage of trading using opposite Mechanics Construction and Vietnam Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechanics Construction position performs unexpectedly, Vietnam 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 Vietnam Petroleum will offset losses from the drop in Vietnam Petroleum's long position.| Mechanics Construction vs. Tng Investment And | Mechanics Construction vs. HVC Investment and | Mechanics Construction vs. PVI Reinsurance Corp | Mechanics Construction vs. Tien Giang Investment |
| Vietnam Petroleum vs. FIT INVEST JSC | Vietnam Petroleum vs. Damsan JSC | Vietnam Petroleum vs. An Phat Plastic | Vietnam Petroleum vs. Alphanam ME |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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