Correlation Between Petrolimex International and Saigon Viendong
Can any of the company-specific risk be diversified away by investing in both Petrolimex International and Saigon Viendong 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 International and Saigon Viendong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex International Trading and Saigon Viendong Technology, you can compare the effects of market volatilities on Petrolimex International and Saigon Viendong 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 International with a short position of Saigon Viendong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex International and Saigon Viendong.
Diversification Opportunities for Petrolimex International and Saigon Viendong
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Petrolimex and Saigon is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex International Tradi and Saigon Viendong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Viendong Tech and Petrolimex International 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 International Trading are associated (or correlated) with Saigon Viendong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Viendong Tech has no effect on the direction of Petrolimex International i.e., Petrolimex International and Saigon Viendong go up and down completely randomly.
Pair Corralation between Petrolimex International and Saigon Viendong
Assuming the 90 days trading horizon Petrolimex International Trading is expected to generate 6.74 times more return on investment than Saigon Viendong. However, Petrolimex International is 6.74 times more volatile than Saigon Viendong Technology. It trades about 0.53 of its potential returns per unit of risk. Saigon Viendong Technology is currently generating about 0.34 per unit of risk. If you would invest 535,000 in Petrolimex International Trading on November 25, 2024 and sell it today you would earn a total of 184,000 from holding Petrolimex International Trading or generate 34.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Petrolimex International Tradi vs. Saigon Viendong Technology
Performance |
Timeline |
Petrolimex International |
Saigon Viendong Tech |
Petrolimex International and Saigon Viendong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petrolimex International and Saigon Viendong
The main advantage of trading using opposite Petrolimex International and Saigon Viendong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex International position performs unexpectedly, Saigon Viendong 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 Viendong will offset losses from the drop in Saigon Viendong's long position.Petrolimex International vs. Vietnam National Reinsurance | ||
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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