Correlation Between PetroVietnam Transportation and Post
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Post 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 Post 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 Post and Telecommunications, you can compare the effects of market volatilities on PetroVietnam Transportation and Post 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 Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Post.
Diversification Opportunities for PetroVietnam Transportation and Post
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PetroVietnam and Post is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni 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 Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Post go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Post
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to under-perform the Post. But the stock apears to be less risky and, when comparing its historical volatility, PetroVietnam Transportation Corp is 2.02 times less risky than Post. The stock trades about -0.08 of its potential returns per unit of risk. The Post and Telecommunications is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 441,000 in Post and Telecommunications on September 4, 2024 and sell it today you would earn a total of 11,000 from holding Post and Telecommunications or generate 2.49% 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. Post and Telecommunications
Performance |
| Timeline |
| PetroVietnam Transportation |
| Post and Telecommuni |
PetroVietnam Transportation and Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and Post
The main advantage of trading using opposite PetroVietnam Transportation and Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Post 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 Post will offset losses from the drop in Post's long position.The idea behind PetroVietnam Transportation Corp and Post and Telecommunications 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.
| Post vs. Vietnam Petroleum Transport | Post vs. Da Nang Construction | Post vs. 1369 Construction JSC | Post vs. PetroVietnam Transportation Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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