Correlation Between Petrovietnam Technical and Tay Ninh
Can any of the company-specific risk be diversified away by investing in both Petrovietnam Technical and Tay Ninh 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 Tay Ninh 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 Tay Ninh Rubber, you can compare the effects of market volatilities on Petrovietnam Technical and Tay Ninh 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 Tay Ninh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrovietnam Technical and Tay Ninh.
Diversification Opportunities for Petrovietnam Technical and Tay Ninh
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petrovietnam and Tay is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Petrovietnam Technical Service and Tay Ninh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tay Ninh 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 Tay Ninh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tay Ninh Rubber has no effect on the direction of Petrovietnam Technical i.e., Petrovietnam Technical and Tay Ninh go up and down completely randomly.
Pair Corralation between Petrovietnam Technical and Tay Ninh
Assuming the 90 days trading horizon Petrovietnam Technical Services is expected to under-perform the Tay Ninh. But the stock apears to be less risky and, when comparing its historical volatility, Petrovietnam Technical Services is 1.88 times less risky than Tay Ninh. The stock trades about -0.4 of its potential returns per unit of risk. The Tay Ninh Rubber is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,290,000 in Tay Ninh Rubber on August 25, 2024 and sell it today you would earn a total of 320,000 from holding Tay Ninh Rubber or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Petrovietnam Technical Service vs. Tay Ninh Rubber
Performance |
| Timeline |
| Petrovietnam Technical |
| Tay Ninh Rubber |
Petrovietnam Technical and Tay Ninh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrovietnam Technical and Tay Ninh
The main advantage of trading using opposite Petrovietnam Technical and Tay Ninh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrovietnam Technical position performs unexpectedly, Tay Ninh 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 Tay Ninh will offset losses from the drop in Tay Ninh's long position.| Petrovietnam Technical vs. POST TELECOMMU | Petrovietnam Technical vs. Elcom Technology Communications | Petrovietnam Technical vs. VTC Telecommunications JSC | Petrovietnam Technical vs. Dong Nai Plastic |
| Tay Ninh vs. Fecon Mining JSC | Tay Ninh vs. Hochiminh City Metal | Tay Ninh vs. BIDV Insurance Corp | Tay Ninh vs. Petrovietnam Technical Services |
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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