Correlation Between PetroVietnam Transportation and Binh Duong
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Binh Duong 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 Binh Duong 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 Binh Duong Trade, you can compare the effects of market volatilities on PetroVietnam Transportation and Binh Duong 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 Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Binh Duong.
Diversification Opportunities for PetroVietnam Transportation and Binh Duong
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroVietnam and Binh is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Binh Duong Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Trade 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 Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Trade has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Binh Duong go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Binh Duong
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to under-perform the Binh Duong. In addition to that, PetroVietnam Transportation is 1.06 times more volatile than Binh Duong Trade. It trades about -0.07 of its total potential returns per unit of risk. Binh Duong Trade is currently generating about -0.05 per unit of volatility. If you would invest 1,120,000 in Binh Duong Trade on October 18, 2024 and sell it today you would lose (20,000) from holding Binh Duong Trade or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroVietnam Transportation Co vs. Binh Duong Trade
Performance |
| Timeline |
| PetroVietnam Transportation |
| Binh Duong Trade |
PetroVietnam Transportation and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and Binh Duong
The main advantage of trading using opposite PetroVietnam Transportation and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.| PetroVietnam Transportation vs. FPT Digital Retail | PetroVietnam Transportation vs. Vincom Retail JSC | PetroVietnam Transportation vs. Fecon Mining JSC | PetroVietnam Transportation vs. Hanoi Beer Alcohol |
| Binh Duong vs. Song Hong Aluminum | Binh Duong vs. CEO Group JSC | Binh Duong vs. Saigon Beer Alcohol | Binh Duong 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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