Correlation Between PetroVietnam Transportation and Masan Group
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Masan Group 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 Masan Group 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 Masan Group Corp, you can compare the effects of market volatilities on PetroVietnam Transportation and Masan Group 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 Masan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Masan Group.
Diversification Opportunities for PetroVietnam Transportation and Masan Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PetroVietnam and Masan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Masan Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masan Group Corp 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 Masan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masan Group Corp has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Masan Group go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Masan Group
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to generate 1.06 times more return on investment than Masan Group. However, PetroVietnam Transportation is 1.06 times more volatile than Masan Group Corp. It trades about 0.04 of its potential returns per unit of risk. Masan Group Corp is currently generating about 0.03 per unit of risk. If you would invest 2,329,228 in PetroVietnam Transportation Corp on September 4, 2024 and sell it today you would earn a total of 360,772 from holding PetroVietnam Transportation Corp or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroVietnam Transportation Co vs. Masan Group Corp
Performance |
| Timeline |
| PetroVietnam Transportation |
| Masan Group Corp |
PetroVietnam Transportation and Masan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and Masan Group
The main advantage of trading using opposite PetroVietnam Transportation and Masan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Masan Group 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 Masan Group will offset losses from the drop in Masan Group's long position.The idea behind PetroVietnam Transportation Corp and Masan Group Corp 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.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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