Correlation Between Saigon Viendong and Petrolimex Insurance
Can any of the company-specific risk be diversified away by investing in both Saigon Viendong and Petrolimex Insurance 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 Saigon Viendong and Petrolimex Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saigon Viendong Technology and Petrolimex Insurance Corp, you can compare the effects of market volatilities on Saigon Viendong and Petrolimex Insurance 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 Saigon Viendong with a short position of Petrolimex Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Viendong and Petrolimex Insurance.
Diversification Opportunities for Saigon Viendong and Petrolimex Insurance
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Saigon and Petrolimex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Viendong Technology and Petrolimex Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Insurance Corp and Saigon Viendong 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 Saigon Viendong Technology are associated (or correlated) with Petrolimex Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Insurance Corp has no effect on the direction of Saigon Viendong i.e., Saigon Viendong and Petrolimex Insurance go up and down completely randomly.
Pair Corralation between Saigon Viendong and Petrolimex Insurance
Assuming the 90 days trading horizon Saigon Viendong is expected to generate 104.72 times less return on investment than Petrolimex Insurance. But when comparing it to its historical volatility, Saigon Viendong Technology is 1.92 times less risky than Petrolimex Insurance. It trades about 0.01 of its potential returns per unit of risk. Petrolimex Insurance Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,175,000 in Petrolimex Insurance Corp on September 1, 2024 and sell it today you would earn a total of 225,000 from holding Petrolimex Insurance Corp or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Saigon Viendong Technology vs. Petrolimex Insurance Corp
Performance |
| Timeline |
| Saigon Viendong Tech |
| Petrolimex Insurance Corp |
Saigon Viendong and Petrolimex Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Viendong and Petrolimex Insurance
The main advantage of trading using opposite Saigon Viendong and Petrolimex Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Viendong position performs unexpectedly, Petrolimex Insurance 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 Insurance will offset losses from the drop in Petrolimex Insurance's long position.| Saigon Viendong vs. FIT INVEST JSC | Saigon Viendong vs. Damsan JSC | Saigon Viendong vs. An Phat Plastic | Saigon Viendong vs. Alphanam ME |
| Petrolimex Insurance vs. FIT INVEST JSC | Petrolimex Insurance vs. Damsan JSC | Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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