Correlation Between PVI Reinsurance and Viet Thanh
Can any of the company-specific risk be diversified away by investing in both PVI Reinsurance and Viet Thanh 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 Viet Thanh 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 Viet Thanh Plastic, you can compare the effects of market volatilities on PVI Reinsurance and Viet Thanh 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 Viet Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVI Reinsurance and Viet Thanh.
Diversification Opportunities for PVI Reinsurance and Viet Thanh
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PVI and Viet is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding PVI Reinsurance Corp and Viet Thanh Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Thanh Plastic 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 Viet Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Thanh Plastic has no effect on the direction of PVI Reinsurance i.e., PVI Reinsurance and Viet Thanh go up and down completely randomly.
Pair Corralation between PVI Reinsurance and Viet Thanh
Assuming the 90 days trading horizon PVI Reinsurance Corp is expected to under-perform the Viet Thanh. In addition to that, PVI Reinsurance is 1.23 times more volatile than Viet Thanh Plastic. It trades about -0.04 of its total potential returns per unit of risk. Viet Thanh Plastic is currently generating about 0.09 per unit of volatility. If you would invest 1,610,000 in Viet Thanh Plastic on August 31, 2024 and sell it today you would earn a total of 50,000 from holding Viet Thanh Plastic or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
PVI Reinsurance Corp vs. Viet Thanh Plastic
Performance |
| Timeline |
| PVI Reinsurance Corp |
| Viet Thanh Plastic |
PVI Reinsurance and Viet Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PVI Reinsurance and Viet Thanh
The main advantage of trading using opposite PVI Reinsurance and Viet Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVI Reinsurance position performs unexpectedly, Viet Thanh 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 Viet Thanh will offset losses from the drop in Viet Thanh's long position.| PVI Reinsurance vs. FIT INVEST JSC | PVI Reinsurance vs. Damsan JSC | PVI Reinsurance vs. An Phat Plastic | PVI Reinsurance vs. Alphanam ME |
| Viet Thanh vs. FIT INVEST JSC | Viet Thanh vs. Damsan JSC | Viet Thanh vs. An Phat Plastic | Viet Thanh 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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