Correlation Between Petrolimex Petrochemical and Tien Phong
Can any of the company-specific risk be diversified away by investing in both Petrolimex Petrochemical and Tien Phong 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 Petrochemical and Tien Phong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex Petrochemical JSC and Tien Phong Plastic, you can compare the effects of market volatilities on Petrolimex Petrochemical and Tien Phong 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 Petrochemical with a short position of Tien Phong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Petrochemical and Tien Phong.
Diversification Opportunities for Petrolimex Petrochemical and Tien Phong
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Petrolimex and Tien is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Petrochemical JSC and Tien Phong Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Phong Plastic and Petrolimex Petrochemical 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 Petrochemical JSC are associated (or correlated) with Tien Phong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Phong Plastic has no effect on the direction of Petrolimex Petrochemical i.e., Petrolimex Petrochemical and Tien Phong go up and down completely randomly.
Pair Corralation between Petrolimex Petrochemical and Tien Phong
Assuming the 90 days trading horizon Petrolimex Petrochemical JSC is expected to under-perform the Tien Phong. In addition to that, Petrolimex Petrochemical is 1.11 times more volatile than Tien Phong Plastic. It trades about -0.16 of its total potential returns per unit of risk. Tien Phong Plastic is currently generating about 0.01 per unit of volatility. If you would invest 5,820,000 in Tien Phong Plastic on August 28, 2024 and sell it today you would earn a total of 10,000 from holding Tien Phong Plastic or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrolimex Petrochemical JSC vs. Tien Phong Plastic
Performance |
| Timeline |
| Petrolimex Petrochemical |
| Tien Phong Plastic |
Petrolimex Petrochemical and Tien Phong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Petrochemical and Tien Phong
The main advantage of trading using opposite Petrolimex Petrochemical and Tien Phong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Petrochemical position performs unexpectedly, Tien Phong 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 Tien Phong will offset losses from the drop in Tien Phong's long position.| Petrolimex Petrochemical vs. FIT INVEST JSC | Petrolimex Petrochemical vs. Damsan JSC | Petrolimex Petrochemical vs. An Phat Plastic | Petrolimex Petrochemical vs. APG Securities Joint |
| Tien Phong vs. Saigon Telecommunication Technologies | Tien Phong vs. Ben Thanh Rubber | Tien Phong vs. Vietnam Rubber Group | Tien Phong vs. Pha Le Plastics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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