Correlation Between Transport and PetroVietnam Transportation
Can any of the company-specific risk be diversified away by investing in both Transport and PetroVietnam Transportation 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 Transportation 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 Transportation Corp, you can compare the effects of market volatilities on Transport and PetroVietnam Transportation 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 Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport and PetroVietnam Transportation.
Diversification Opportunities for Transport and PetroVietnam Transportation
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Transport and PetroVietnam is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Transport and Industry and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation 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 Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroVietnam Transportation has no effect on the direction of Transport i.e., Transport and PetroVietnam Transportation go up and down completely randomly.
Pair Corralation between Transport and PetroVietnam Transportation
Assuming the 90 days trading horizon Transport and Industry is expected to under-perform the PetroVietnam Transportation. In addition to that, Transport is 1.64 times more volatile than PetroVietnam Transportation Corp. It trades about -0.21 of its total potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.08 per unit of volatility. If you would invest 2,755,000 in PetroVietnam Transportation Corp on September 2, 2024 and sell it today you would lose (55,000) from holding PetroVietnam Transportation Corp or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport and Industry vs. PetroVietnam Transportation Co
Performance |
| Timeline |
| Transport and Industry |
| PetroVietnam Transportation |
Transport and PetroVietnam Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport and PetroVietnam Transportation
The main advantage of trading using opposite Transport and PetroVietnam Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport position performs unexpectedly, PetroVietnam Transportation 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 Transportation will offset losses from the drop in PetroVietnam Transportation's long position.| Transport vs. Tienlen Steel Corp | Transport vs. PVI Reinsurance Corp | Transport vs. Vietnam National Reinsurance | Transport vs. CEO Group JSC |
| PetroVietnam Transportation vs. Da Nang Construction | PetroVietnam Transportation vs. Danang Rubber JSC | PetroVietnam Transportation vs. Thong Nhat Rubber | PetroVietnam Transportation vs. Dong Nai Plastic |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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