Correlation Between Transport and Vietnam Petroleum
Can any of the company-specific risk be diversified away by investing in both Transport and Vietnam Petroleum 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 Vietnam Petroleum 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 Vietnam Petroleum Transport, you can compare the effects of market volatilities on Transport and Vietnam Petroleum 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 Vietnam Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport and Vietnam Petroleum.
Diversification Opportunities for Transport and Vietnam Petroleum
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transport and Vietnam is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Transport and Industry and Vietnam Petroleum Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Petroleum 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 Vietnam Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Petroleum has no effect on the direction of Transport i.e., Transport and Vietnam Petroleum go up and down completely randomly.
Pair Corralation between Transport and Vietnam Petroleum
Assuming the 90 days trading horizon Transport and Industry is expected to under-perform the Vietnam Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Transport and Industry is 1.77 times less risky than Vietnam Petroleum. The stock trades about -0.56 of its potential returns per unit of risk. The Vietnam Petroleum Transport is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,410,000 in Vietnam Petroleum Transport on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Vietnam Petroleum Transport or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport and Industry vs. Vietnam Petroleum Transport
Performance |
| Timeline |
| Transport and Industry |
| Vietnam Petroleum |
Transport and Vietnam Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport and Vietnam Petroleum
The main advantage of trading using opposite Transport and Vietnam Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport position performs unexpectedly, Vietnam Petroleum 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 Vietnam Petroleum will offset losses from the drop in Vietnam Petroleum's long position.| Transport vs. MST Investment JSC | Transport vs. Techno Agricultural Supplying | Transport vs. Visicons Construction and | Transport vs. Tng Investment And |
| Vietnam Petroleum vs. Tin Nghia Industrial | Vietnam Petroleum vs. Viettel Construction JSC | Vietnam Petroleum vs. Hung Hau Agricultural | Vietnam Petroleum vs. Nam Kim Steel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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