Correlation Between Post and Vietnam Petroleum
Can any of the company-specific risk be diversified away by investing in both Post and Vietnam Petroleum 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 Post and Vietnam Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post and Telecommunications and Vietnam Petroleum Transport, you can compare the effects of market volatilities on Post and Vietnam Petroleum 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 Post with a short position of Vietnam Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and Vietnam Petroleum.
Diversification Opportunities for Post and Vietnam Petroleum
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Post and Vietnam is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and Vietnam Petroleum Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Petroleum and Post 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 Post and Telecommunications are associated (or correlated) with Vietnam Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Petroleum has no effect on the direction of Post i.e., Post and Vietnam Petroleum go up and down completely randomly.
Pair Corralation between Post and Vietnam Petroleum
Assuming the 90 days trading horizon Post and Telecommunications is expected to under-perform the Vietnam Petroleum. In addition to that, Post is 1.42 times more volatile than Vietnam Petroleum Transport. It trades about -0.06 of its total potential returns per unit of risk. Vietnam Petroleum Transport is currently generating about 0.13 per unit of volatility. If you would invest 1,255,000 in Vietnam Petroleum Transport on September 2, 2024 and sell it today you would earn a total of 165,000 from holding Vietnam Petroleum Transport or generate 13.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Post and Telecommunications vs. Vietnam Petroleum Transport
Performance |
| Timeline |
| Post and Telecommuni |
| Vietnam Petroleum |
Post and Vietnam Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post and Vietnam Petroleum
The main advantage of trading using opposite Post and Vietnam Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post position performs unexpectedly, Vietnam Petroleum 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 Vietnam Petroleum will offset losses from the drop in Vietnam Petroleum's long position.The idea behind Post and Telecommunications and Vietnam Petroleum Transport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Vietnam Petroleum vs. Everland Investment JSC | Vietnam Petroleum vs. Tin Nghia Industrial | Vietnam Petroleum vs. PV2 Investment JSC | Vietnam Petroleum vs. Vien Dong Investment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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