Correlation Between Truong Thanh and Petrolimex Insurance
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Petrolimex Insurance 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 Truong Thanh and Petrolimex Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truong Thanh Furniture and Petrolimex Insurance Corp, you can compare the effects of market volatilities on Truong Thanh and Petrolimex Insurance 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 Truong Thanh with a short position of Petrolimex Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Petrolimex Insurance.
Diversification Opportunities for Truong Thanh and Petrolimex Insurance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Truong and Petrolimex is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Petrolimex Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Insurance Corp and Truong Thanh 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 Truong Thanh Furniture are associated (or correlated) with Petrolimex Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Insurance Corp has no effect on the direction of Truong Thanh i.e., Truong Thanh and Petrolimex Insurance go up and down completely randomly.
Pair Corralation between Truong Thanh and Petrolimex Insurance
Assuming the 90 days trading horizon Truong Thanh is expected to generate 7.53 times less return on investment than Petrolimex Insurance. In addition to that, Truong Thanh is 1.52 times more volatile than Petrolimex Insurance Corp. It trades about 0.02 of its total potential returns per unit of risk. Petrolimex Insurance Corp is currently generating about 0.2 per unit of volatility. If you would invest 2,250,000 in Petrolimex Insurance Corp on August 27, 2024 and sell it today you would earn a total of 100,000 from holding Petrolimex Insurance Corp or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Petrolimex Insurance Corp
Performance |
| Timeline |
| Truong Thanh Furniture |
| Petrolimex Insurance Corp |
Truong Thanh and Petrolimex Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Petrolimex Insurance
The main advantage of trading using opposite Truong Thanh and Petrolimex Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Petrolimex Insurance 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 Insurance will offset losses from the drop in Petrolimex Insurance's long position.| Truong Thanh vs. FIT INVEST JSC | Truong Thanh vs. Damsan JSC | Truong Thanh vs. An Phat Plastic | Truong Thanh vs. APG Securities Joint |
| Petrolimex Insurance vs. FIT INVEST JSC | Petrolimex Insurance vs. Damsan JSC | Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance vs. APG Securities Joint |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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