Correlation Between Petrolimex International and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Petrolimex International and Binh Duong 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 Binh Duong 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 Binh Duong Trade, you can compare the effects of market volatilities on Petrolimex International and Binh Duong 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 Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex International and Binh Duong.
Diversification Opportunities for Petrolimex International and Binh Duong
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrolimex and Binh is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex International Tradi and Binh Duong Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Trade 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 Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Trade has no effect on the direction of Petrolimex International i.e., Petrolimex International and Binh Duong go up and down completely randomly.
Pair Corralation between Petrolimex International and Binh Duong
Assuming the 90 days trading horizon Petrolimex International Trading is expected to generate 1.15 times more return on investment than Binh Duong. However, Petrolimex International is 1.15 times more volatile than Binh Duong Trade. It trades about 0.02 of its potential returns per unit of risk. Binh Duong Trade is currently generating about 0.01 per unit of risk. If you would invest 457,000 in Petrolimex International Trading on August 31, 2024 and sell it today you would earn a total of 58,000 from holding Petrolimex International Trading or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.09% |
| Values | Daily Returns |
Petrolimex International Tradi vs. Binh Duong Trade
Performance |
| Timeline |
| Petrolimex International |
| Binh Duong Trade |
Petrolimex International and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex International and Binh Duong
The main advantage of trading using opposite Petrolimex International and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex International position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.| Petrolimex International vs. FIT INVEST JSC | Petrolimex International vs. Damsan JSC | Petrolimex International vs. An Phat Plastic | Petrolimex International vs. Alphanam ME |
| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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