Correlation Between Pacific Petroleum and VN Index
Can any of the company-specific risk be diversified away by investing in both Pacific Petroleum and VN Index 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 VN Index 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 VN Index, you can compare the effects of market volatilities on Pacific Petroleum and VN Index 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 VN Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Petroleum and VN Index.
Diversification Opportunities for Pacific Petroleum and VN Index
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pacific and VNI is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Petroleum Transportati and VN Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VN Index 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 VN Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VN Index has no effect on the direction of Pacific Petroleum i.e., Pacific Petroleum and VN Index go up and down completely randomly.
Pair Corralation between Pacific Petroleum and VN Index
Assuming the 90 days trading horizon Pacific Petroleum Transportation is expected to generate 2.54 times more return on investment than VN Index. However, Pacific Petroleum is 2.54 times more volatile than VN Index. It trades about 0.04 of its potential returns per unit of risk. VN Index is currently generating about 0.0 per unit of risk. If you would invest 1,518,847 in Pacific Petroleum Transportation on September 12, 2024 and sell it today you would earn a total of 116,153 from holding Pacific Petroleum Transportation or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pacific Petroleum Transportati vs. VN Index
Performance |
| Timeline |
Pacific Petroleum and VN Index Volatility Contrast
Predicted Return Density |
| Returns |
Pacific Petroleum Transportation
Pair trading matchups for Pacific Petroleum
VN Index
Pair trading matchups for VN Index
Pair Trading with Pacific Petroleum and VN Index
The main advantage of trading using opposite Pacific Petroleum and VN Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Petroleum position performs unexpectedly, VN Index 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 VN Index will offset losses from the drop in VN Index's long position.| Pacific Petroleum vs. Vietnam Petroleum Transport | Pacific Petroleum vs. Post and Telecommunications | Pacific Petroleum vs. Thanh Dat Investment | Pacific Petroleum vs. Travel Investment and |
| VN Index vs. Mobile World Investment | VN Index vs. Petrolimex Insurance Corp | VN Index vs. Thanh Dat Investment | VN Index vs. Duong Hieu Trading |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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