Correlation Between PetroVietnam Transportation and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Fecon Mining 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 Transportation and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroVietnam Transportation Corp and Fecon Mining JSC, you can compare the effects of market volatilities on PetroVietnam Transportation and Fecon Mining 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 Transportation with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Fecon Mining.
Diversification Opportunities for PetroVietnam Transportation and Fecon Mining
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PetroVietnam and Fecon is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Fecon Mining JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fecon Mining JSC and PetroVietnam Transportation 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 Transportation Corp are associated (or correlated) with Fecon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fecon Mining JSC has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Fecon Mining go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Fecon Mining
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to generate 0.85 times more return on investment than Fecon Mining. However, PetroVietnam Transportation Corp is 1.17 times less risky than Fecon Mining. It trades about -0.15 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about -0.28 per unit of risk. If you would invest 2,810,000 in PetroVietnam Transportation Corp on September 1, 2024 and sell it today you would lose (110,000) from holding PetroVietnam Transportation Corp or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroVietnam Transportation Co vs. Fecon Mining JSC
Performance |
| Timeline |
| PetroVietnam Transportation |
| Fecon Mining JSC |
PetroVietnam Transportation and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and Fecon Mining
The main advantage of trading using opposite PetroVietnam Transportation and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Fecon Mining 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 Fecon Mining will offset losses from the drop in Fecon Mining's long position.| PetroVietnam Transportation vs. FIT INVEST JSC | PetroVietnam Transportation vs. Damsan JSC | PetroVietnam Transportation vs. An Phat Plastic | PetroVietnam Transportation vs. Alphanam ME |
| Fecon Mining vs. Vien Dong Investment | Fecon Mining vs. CMC Investment JSC | Fecon Mining vs. Dong A Hotel | Fecon Mining vs. Development Investment Construction |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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