Correlation Between PetroVietnam Transportation and Petrolimex Petrochemical
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Petrolimex Petrochemical 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 Petrolimex Petrochemical 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 Petrolimex Petrochemical JSC, you can compare the effects of market volatilities on PetroVietnam Transportation and Petrolimex Petrochemical 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 Petrolimex Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Petrolimex Petrochemical.
Diversification Opportunities for PetroVietnam Transportation and Petrolimex Petrochemical
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PetroVietnam and Petrolimex is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Petrolimex Petrochemical JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Petrochemical 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 Petrolimex Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Petrochemical has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Petrolimex Petrochemical go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Petrolimex Petrochemical
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to generate 0.99 times more return on investment than Petrolimex Petrochemical. However, PetroVietnam Transportation Corp is 1.01 times less risky than Petrolimex Petrochemical. It trades about 0.06 of its potential returns per unit of risk. Petrolimex Petrochemical JSC is currently generating about -0.05 per unit of risk. If you would invest 1,840,186 in PetroVietnam Transportation Corp on September 1, 2024 and sell it today you would earn a total of 859,814 from holding PetroVietnam Transportation Corp or generate 46.72% 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. Petrolimex Petrochemical JSC
Performance |
| Timeline |
| PetroVietnam Transportation |
| Petrolimex Petrochemical |
PetroVietnam Transportation and Petrolimex Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and Petrolimex Petrochemical
The main advantage of trading using opposite PetroVietnam Transportation and Petrolimex Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Petrolimex Petrochemical 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 Petrolimex Petrochemical will offset losses from the drop in Petrolimex Petrochemical'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 |
| Petrolimex Petrochemical vs. FIT INVEST JSC | Petrolimex Petrochemical vs. Damsan JSC | Petrolimex Petrochemical vs. An Phat Plastic | Petrolimex Petrochemical vs. Alphanam ME |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |