Correlation Between PVI Reinsurance and Petrovietnam Technical
Can any of the company-specific risk be diversified away by investing in both PVI Reinsurance and Petrovietnam Technical 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 PVI Reinsurance and Petrovietnam Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PVI Reinsurance Corp and Petrovietnam Technical Services, you can compare the effects of market volatilities on PVI Reinsurance and Petrovietnam Technical 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 PVI Reinsurance with a short position of Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVI Reinsurance and Petrovietnam Technical.
Diversification Opportunities for PVI Reinsurance and Petrovietnam Technical
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PVI and Petrovietnam is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PVI Reinsurance Corp and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical and PVI Reinsurance 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 PVI Reinsurance Corp are associated (or correlated) with Petrovietnam Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrovietnam Technical has no effect on the direction of PVI Reinsurance i.e., PVI Reinsurance and Petrovietnam Technical go up and down completely randomly.
Pair Corralation between PVI Reinsurance and Petrovietnam Technical
Assuming the 90 days trading horizon PVI Reinsurance Corp is expected to generate 2.69 times more return on investment than Petrovietnam Technical. However, PVI Reinsurance is 2.69 times more volatile than Petrovietnam Technical Services. It trades about 0.18 of its potential returns per unit of risk. Petrovietnam Technical Services is currently generating about -0.07 per unit of risk. If you would invest 1,840,000 in PVI Reinsurance Corp on October 8, 2024 and sell it today you would earn a total of 170,000 from holding PVI Reinsurance Corp or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
PVI Reinsurance Corp vs. Petrovietnam Technical Service
Performance |
| Timeline |
| PVI Reinsurance Corp |
| Petrovietnam Technical |
PVI Reinsurance and Petrovietnam Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PVI Reinsurance and Petrovietnam Technical
The main advantage of trading using opposite PVI Reinsurance and Petrovietnam Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVI Reinsurance position performs unexpectedly, Petrovietnam Technical 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 Technical will offset losses from the drop in Petrovietnam Technical's long position.| PVI Reinsurance vs. FIT INVEST JSC | PVI Reinsurance vs. Damsan JSC | PVI Reinsurance vs. An Phat Plastic | PVI Reinsurance vs. APG Securities Joint |
| Petrovietnam Technical vs. FIT INVEST JSC | Petrovietnam Technical vs. Damsan JSC | Petrovietnam Technical vs. An Phat Plastic | Petrovietnam Technical vs. APG Securities Joint |
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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