Correlation Between Tien Giang and Petrovietnam Technical
Can any of the company-specific risk be diversified away by investing in both Tien Giang 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 Tien Giang and Petrovietnam Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Giang Investment and Petrovietnam Technical Services, you can compare the effects of market volatilities on Tien Giang 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 Tien Giang with a short position of Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Giang and Petrovietnam Technical.
Diversification Opportunities for Tien Giang and Petrovietnam Technical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tien and Petrovietnam is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tien Giang Investment and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical and Tien Giang 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 Tien Giang Investment 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 Tien Giang i.e., Tien Giang and Petrovietnam Technical go up and down completely randomly.
Pair Corralation between Tien Giang and Petrovietnam Technical
Assuming the 90 days trading horizon Tien Giang is expected to generate 1.4 times less return on investment than Petrovietnam Technical. But when comparing it to its historical volatility, Tien Giang Investment is 1.37 times less risky than Petrovietnam Technical. It trades about 0.05 of its potential returns per unit of risk. Petrovietnam Technical Services is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,138,432 in Petrovietnam Technical Services on September 2, 2024 and sell it today you would earn a total of 1,251,568 from holding Petrovietnam Technical Services or generate 58.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tien Giang Investment vs. Petrovietnam Technical Service
Performance |
| Timeline |
| Tien Giang Investment |
| Petrovietnam Technical |
Tien Giang and Petrovietnam Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Giang and Petrovietnam Technical
The main advantage of trading using opposite Tien Giang and Petrovietnam Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Giang 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.| Tien Giang vs. FIT INVEST JSC | Tien Giang vs. Damsan JSC | Tien Giang vs. An Phat Plastic | Tien Giang vs. Alphanam ME |
| Petrovietnam Technical vs. FIT INVEST JSC | Petrovietnam Technical vs. Damsan JSC | Petrovietnam Technical vs. An Phat Plastic | Petrovietnam Technical 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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