Correlation Between PetroVietnam Transportation and Global Electrical
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Global Electrical 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 Global Electrical 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 Global Electrical Technology, you can compare the effects of market volatilities on PetroVietnam Transportation and Global Electrical 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 Global Electrical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Global Electrical.
Diversification Opportunities for PetroVietnam Transportation and Global Electrical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PetroVietnam and Global is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Global Electrical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Electrical 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 Global Electrical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Electrical has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Global Electrical go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Global Electrical
Assuming the 90 days trading horizon PetroVietnam Transportation is expected to generate 4.48 times less return on investment than Global Electrical. But when comparing it to its historical volatility, PetroVietnam Transportation Corp is 2.71 times less risky than Global Electrical. It trades about 0.04 of its potential returns per unit of risk. Global Electrical Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,780,280 in Global Electrical Technology on November 28, 2024 and sell it today you would earn a total of 1,919,720 from holding Global Electrical Technology or generate 107.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 60.08% |
| Values | Daily Returns |
PetroVietnam Transportation Co vs. Global Electrical Technology
Performance |
| Timeline |
| PetroVietnam Transportation |
| Global Electrical |
PetroVietnam Transportation and Global Electrical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and Global Electrical
The main advantage of trading using opposite PetroVietnam Transportation and Global Electrical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Global Electrical 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 Global Electrical will offset losses from the drop in Global Electrical's long position.The idea behind PetroVietnam Transportation Corp and Global Electrical Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Global Electrical vs. Vietnam Petroleum Transport | Global Electrical vs. PostTelecommunication Equipment | Global Electrical vs. Hochiminh City Metal | Global Electrical vs. Elcom Technology Communications |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |