Correlation Between TDT Investment and Petrolimex Information
Can any of the company-specific risk be diversified away by investing in both TDT Investment and Petrolimex Information 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 TDT Investment and Petrolimex Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TDT Investment and and Petrolimex Information Technology, you can compare the effects of market volatilities on TDT Investment and Petrolimex Information 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 TDT Investment with a short position of Petrolimex Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of TDT Investment and Petrolimex Information.
Diversification Opportunities for TDT Investment and Petrolimex Information
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TDT and Petrolimex is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding TDT Investment and and Petrolimex Information Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Information and TDT Investment 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 TDT Investment and are associated (or correlated) with Petrolimex Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Information has no effect on the direction of TDT Investment i.e., TDT Investment and Petrolimex Information go up and down completely randomly.
Pair Corralation between TDT Investment and Petrolimex Information
Assuming the 90 days trading horizon TDT Investment is expected to generate 6.42 times less return on investment than Petrolimex Information. But when comparing it to its historical volatility, TDT Investment and is 2.58 times less risky than Petrolimex Information. It trades about 0.13 of its potential returns per unit of risk. Petrolimex Information Technology is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,630,000 in Petrolimex Information Technology on November 8, 2024 and sell it today you would earn a total of 260,000 from holding Petrolimex Information Technology or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.94% |
| Values | Daily Returns |
TDT Investment and vs. Petrolimex Information Technol
Performance |
| Timeline |
| TDT Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Petrolimex Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
TDT Investment and Petrolimex Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TDT Investment and Petrolimex Information
The main advantage of trading using opposite TDT Investment and Petrolimex Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TDT Investment position performs unexpectedly, Petrolimex Information 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 Information will offset losses from the drop in Petrolimex Information's long position.| TDT Investment vs. Ben Thanh Rubber | TDT Investment vs. Transport and Industry | TDT Investment vs. Innovative Technology Development | TDT Investment vs. Mobile World Investment |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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