Correlation Between Petrolimex Information and PetroVietnam Transportation
Can any of the company-specific risk be diversified away by investing in both Petrolimex Information 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 Petrolimex Information and PetroVietnam Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex Information Technology and PetroVietnam Transportation Corp, you can compare the effects of market volatilities on Petrolimex Information 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 Petrolimex Information with a short position of PetroVietnam Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Information and PetroVietnam Transportation.
Diversification Opportunities for Petrolimex Information and PetroVietnam Transportation
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Petrolimex and PetroVietnam is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and Petrolimex Information 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 Petrolimex Information Technology 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 Petrolimex Information i.e., Petrolimex Information and PetroVietnam Transportation go up and down completely randomly.
Pair Corralation between Petrolimex Information and PetroVietnam Transportation
Assuming the 90 days trading horizon Petrolimex Information Technology is expected to generate 2.43 times more return on investment than PetroVietnam Transportation. However, Petrolimex Information is 2.43 times more volatile than PetroVietnam Transportation Corp. It trades about 0.18 of its potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.22 per unit of risk. If you would invest 2,720,000 in Petrolimex Information Technology on October 28, 2024 and sell it today you would earn a total of 170,000 from holding Petrolimex Information Technology or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 57.14% |
| Values | Daily Returns |
Petrolimex Information Technol vs. PetroVietnam Transportation Co
Performance |
| Timeline |
| Petrolimex Information |
| PetroVietnam Transportation |
Petrolimex Information and PetroVietnam Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Information and PetroVietnam Transportation
The main advantage of trading using opposite Petrolimex Information and PetroVietnam Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Information 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.| Petrolimex Information vs. Ba Ria Thermal | Petrolimex Information vs. CEO Group JSC | Petrolimex Information vs. Pha Le Plastics | Petrolimex Information vs. Tay Ninh Rubber |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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