Correlation Between Petrovietnam Technical and Sao Vang
Can any of the company-specific risk be diversified away by investing in both Petrovietnam Technical and Sao Vang 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 Petrovietnam Technical and Sao Vang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrovietnam Technical Services and Sao Vang Rubber, you can compare the effects of market volatilities on Petrovietnam Technical and Sao Vang 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 Petrovietnam Technical with a short position of Sao Vang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrovietnam Technical and Sao Vang.
Diversification Opportunities for Petrovietnam Technical and Sao Vang
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrovietnam and Sao is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Petrovietnam Technical Service and Sao Vang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Vang Rubber and Petrovietnam Technical 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 Petrovietnam Technical Services are associated (or correlated) with Sao Vang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Vang Rubber has no effect on the direction of Petrovietnam Technical i.e., Petrovietnam Technical and Sao Vang go up and down completely randomly.
Pair Corralation between Petrovietnam Technical and Sao Vang
Assuming the 90 days trading horizon Petrovietnam Technical Services is expected to under-perform the Sao Vang. But the stock apears to be less risky and, when comparing its historical volatility, Petrovietnam Technical Services is 3.15 times less risky than Sao Vang. The stock trades about -0.28 of its potential returns per unit of risk. The Sao Vang Rubber is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,570,000 in Sao Vang Rubber on August 31, 2024 and sell it today you would earn a total of 20,000 from holding Sao Vang Rubber or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 59.09% |
| Values | Daily Returns |
Petrovietnam Technical Service vs. Sao Vang Rubber
Performance |
| Timeline |
| Petrovietnam Technical |
| Sao Vang Rubber |
Petrovietnam Technical and Sao Vang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrovietnam Technical and Sao Vang
The main advantage of trading using opposite Petrovietnam Technical and Sao Vang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrovietnam Technical position performs unexpectedly, Sao Vang 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 Sao Vang will offset losses from the drop in Sao Vang's long position.| Petrovietnam Technical vs. FIT INVEST JSC | Petrovietnam Technical vs. Damsan JSC | Petrovietnam Technical vs. An Phat Plastic | Petrovietnam Technical vs. Alphanam ME |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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