Correlation Between Truong Thanh and Petrovietnam Technical
Can any of the company-specific risk be diversified away by investing in both Truong Thanh 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 Truong Thanh and Petrovietnam Technical 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 Petrovietnam Technical Services, you can compare the effects of market volatilities on Truong Thanh 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 Truong Thanh with a short position of Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Petrovietnam Technical.
Diversification Opportunities for Truong Thanh and Petrovietnam Technical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Truong and Petrovietnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical 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 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 Truong Thanh i.e., Truong Thanh and Petrovietnam Technical go up and down completely randomly.
Pair Corralation between Truong Thanh and Petrovietnam Technical
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to generate 1.73 times more return on investment than Petrovietnam Technical. However, Truong Thanh is 1.73 times more volatile than Petrovietnam Technical Services. It trades about 0.07 of its potential returns per unit of risk. Petrovietnam Technical Services is currently generating about -0.07 per unit of risk. If you would invest 308,000 in Truong Thanh Furniture on October 8, 2024 and sell it today you would earn a total of 7,000 from holding Truong Thanh Furniture or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Petrovietnam Technical Service
Performance |
| Timeline |
| Truong Thanh Furniture |
| Petrovietnam Technical |
Truong Thanh and Petrovietnam Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Petrovietnam Technical
The main advantage of trading using opposite Truong Thanh and Petrovietnam Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh 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.| Truong Thanh vs. FIT INVEST JSC | Truong Thanh vs. Damsan JSC | Truong Thanh vs. An Phat Plastic | Truong Thanh vs. APG Securities Joint |
| Petrovietnam Technical vs. FIT INVEST JSC | Petrovietnam Technical vs. Damsan JSC | Petrovietnam Technical vs. An Phat Plastic | Petrovietnam Technical 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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