Correlation Between Petrolimex Information and Saigon Machinery
Can any of the company-specific risk be diversified away by investing in both Petrolimex Information and Saigon Machinery 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 Saigon Machinery 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 Saigon Machinery Spare, you can compare the effects of market volatilities on Petrolimex Information and Saigon Machinery 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 Saigon Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Information and Saigon Machinery.
Diversification Opportunities for Petrolimex Information and Saigon Machinery
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petrolimex and Saigon is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and Saigon Machinery Spare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Machinery Spare 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 Saigon Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Machinery Spare has no effect on the direction of Petrolimex Information i.e., Petrolimex Information and Saigon Machinery go up and down completely randomly.
Pair Corralation between Petrolimex Information and Saigon Machinery
Assuming the 90 days trading horizon Petrolimex Information is expected to generate 3.02 times less return on investment than Saigon Machinery. In addition to that, Petrolimex Information is 1.11 times more volatile than Saigon Machinery Spare. It trades about 0.05 of its total potential returns per unit of risk. Saigon Machinery Spare is currently generating about 0.18 per unit of volatility. If you would invest 801,476 in Saigon Machinery Spare on November 7, 2024 and sell it today you would earn a total of 798,524 from holding Saigon Machinery Spare or generate 99.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.2% |
| Values | Daily Returns |
Petrolimex Information Technol vs. Saigon Machinery Spare
Performance |
| Timeline |
| Petrolimex Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Saigon Machinery Spare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Excellent
Petrolimex Information and Saigon Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Information and Saigon Machinery
The main advantage of trading using opposite Petrolimex Information and Saigon Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Information position performs unexpectedly, Saigon Machinery 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 Saigon Machinery will offset losses from the drop in Saigon Machinery's long position.| Petrolimex Information vs. Elcom Technology Communications | Petrolimex Information vs. HUD1 Investment and | Petrolimex Information vs. Vietnam JSCmmercial Bank | Petrolimex Information vs. Hai An Transport |
| Saigon Machinery vs. Transport and Industry | Saigon Machinery vs. Innovative Technology Development | Saigon Machinery vs. Vietnam JSCmmercial Bank | Saigon Machinery vs. Elcom Technology Communications |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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