Correlation Between PetroVietnam Transportation and Pha Le
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on PetroVietnam Transportation and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Pha Le.
Diversification Opportunities for PetroVietnam Transportation and Pha Le
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PetroVietnam and Pha is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Pha Le go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Pha Le
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to generate 0.76 times more return on investment than Pha Le. However, PetroVietnam Transportation Corp is 1.31 times less risky than Pha Le. It trades about 0.0 of its potential returns per unit of risk. Pha Le Plastics is currently generating about -0.11 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 (5,000) from holding PetroVietnam Transportation Corp or give up 0.18% 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. Pha Le Plastics
Performance |
| Timeline |
| PetroVietnam Transportation |
| Pha Le Plastics |
PetroVietnam Transportation and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and Pha Le
The main advantage of trading using opposite PetroVietnam Transportation and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le'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 |
| Pha Le vs. FIT INVEST JSC | Pha Le vs. Damsan JSC | Pha Le vs. An Phat Plastic | Pha Le vs. APG Securities Joint |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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