Correlation Between Pacific Petroleum and La Hien
Can any of the company-specific risk be diversified away by investing in both Pacific Petroleum and La Hien 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 Pacific Petroleum and La Hien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Petroleum Transportation and La Hien Cement, you can compare the effects of market volatilities on Pacific Petroleum and La Hien 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 Pacific Petroleum with a short position of La Hien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Petroleum and La Hien.
Diversification Opportunities for Pacific Petroleum and La Hien
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pacific and CLH is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Petroleum Transportati and La Hien Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Hien Cement and Pacific Petroleum 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 Pacific Petroleum Transportation are associated (or correlated) with La Hien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Hien Cement has no effect on the direction of Pacific Petroleum i.e., Pacific Petroleum and La Hien go up and down completely randomly.
Pair Corralation between Pacific Petroleum and La Hien
Assuming the 90 days trading horizon Pacific Petroleum Transportation is expected to generate 1.93 times more return on investment than La Hien. However, Pacific Petroleum is 1.93 times more volatile than La Hien Cement. It trades about 0.03 of its potential returns per unit of risk. La Hien Cement is currently generating about 0.02 per unit of risk. If you would invest 1,544,737 in Pacific Petroleum Transportation on September 3, 2024 and sell it today you would earn a total of 80,263 from holding Pacific Petroleum Transportation or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.49% |
| Values | Daily Returns |
Pacific Petroleum Transportati vs. La Hien Cement
Performance |
| Timeline |
| Pacific Petroleum |
| La Hien Cement |
Pacific Petroleum and La Hien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Petroleum and La Hien
The main advantage of trading using opposite Pacific Petroleum and La Hien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Petroleum position performs unexpectedly, La Hien 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 La Hien will offset losses from the drop in La Hien's long position.| Pacific Petroleum vs. Techno Agricultural Supplying | Pacific Petroleum vs. Saigon Beer Alcohol | Pacific Petroleum vs. Saigon Viendong Technology | Pacific Petroleum vs. Innovative Technology Development |
| La Hien vs. Petrolimex Insurance Corp | La Hien vs. Hochiminh City Metal | La Hien vs. Vietnam Petroleum Transport | La Hien vs. Military Insurance Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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