Correlation Between Transport and Petrovietnam Technical
Can any of the company-specific risk be diversified away by investing in both Transport and Petrovietnam Technical 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 Transport and Petrovietnam Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport and Industry and Petrovietnam Technical Services, you can compare the effects of market volatilities on Transport and Petrovietnam Technical 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 Transport with a short position of Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport and Petrovietnam Technical.
Diversification Opportunities for Transport and Petrovietnam Technical
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transport and Petrovietnam is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Transport and Industry and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical and Transport 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 Transport and Industry are associated (or correlated) with Petrovietnam Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrovietnam Technical has no effect on the direction of Transport i.e., Transport and Petrovietnam Technical go up and down completely randomly.
Pair Corralation between Transport and Petrovietnam Technical
Assuming the 90 days trading horizon Transport and Industry is expected to under-perform the Petrovietnam Technical. In addition to that, Transport is 5.27 times more volatile than Petrovietnam Technical Services. It trades about -0.19 of its total potential returns per unit of risk. Petrovietnam Technical Services is currently generating about -0.06 per unit of volatility. If you would invest 3,984,615 in Petrovietnam Technical Services on September 3, 2024 and sell it today you would lose (594,615) from holding Petrovietnam Technical Services or give up 14.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.33% |
| Values | Daily Returns |
Transport and Industry vs. Petrovietnam Technical Service
Performance |
| Timeline |
| Transport and Industry |
| Petrovietnam Technical |
Transport and Petrovietnam Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport and Petrovietnam Technical
The main advantage of trading using opposite Transport and Petrovietnam Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport position performs unexpectedly, Petrovietnam Technical 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 Petrovietnam Technical will offset losses from the drop in Petrovietnam Technical's long position.| Transport vs. FIT INVEST JSC | Transport vs. Damsan JSC | Transport vs. An Phat Plastic | Transport 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |