Correlation Between PetroVietnam Transportation and FIT INVEST
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and FIT INVEST 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 FIT INVEST 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 FIT INVEST JSC, you can compare the effects of market volatilities on PetroVietnam Transportation and FIT INVEST 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 FIT INVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and FIT INVEST.
Diversification Opportunities for PetroVietnam Transportation and FIT INVEST
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PetroVietnam and FIT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST 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 FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and FIT INVEST go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and FIT INVEST
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to generate 1.05 times more return on investment than FIT INVEST. However, PetroVietnam Transportation is 1.05 times more volatile than FIT INVEST JSC. It trades about -0.01 of its potential returns per unit of risk. FIT INVEST JSC is currently generating about -0.12 per unit of risk. If you would invest 2,730,000 in PetroVietnam Transportation Corp on August 28, 2024 and sell it today you would lose (15,000) from holding PetroVietnam Transportation Corp or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroVietnam Transportation Co vs. FIT INVEST JSC
Performance |
| Timeline |
| PetroVietnam Transportation |
| FIT INVEST JSC |
PetroVietnam Transportation and FIT INVEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and FIT INVEST
The main advantage of trading using opposite PetroVietnam Transportation and FIT INVEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, FIT INVEST 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 FIT INVEST will offset losses from the drop in FIT INVEST's long position.| PetroVietnam Transportation vs. FIT INVEST JSC | PetroVietnam Transportation vs. Damsan JSC | PetroVietnam Transportation vs. An Phat Plastic | PetroVietnam Transportation vs. APG Securities Joint |
| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. APG Securities Joint | FIT INVEST vs. Binhthuan Agriculture 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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