Correlation Between Vnsteel Vicasa and Vietnam Petroleum
Can any of the company-specific risk be diversified away by investing in both Vnsteel Vicasa 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 Vnsteel Vicasa and Vietnam Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vnsteel Vicasa JSC and Vietnam Petroleum Transport, you can compare the effects of market volatilities on Vnsteel Vicasa 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 Vnsteel Vicasa with a short position of Vietnam Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vnsteel Vicasa and Vietnam Petroleum.
Diversification Opportunities for Vnsteel Vicasa and Vietnam Petroleum
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vnsteel and Vietnam is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vnsteel Vicasa JSC and Vietnam Petroleum Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Petroleum and Vnsteel Vicasa 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 Vnsteel Vicasa JSC 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 Vnsteel Vicasa i.e., Vnsteel Vicasa and Vietnam Petroleum go up and down completely randomly.
Pair Corralation between Vnsteel Vicasa and Vietnam Petroleum
Assuming the 90 days trading horizon Vnsteel Vicasa JSC is expected to under-perform the Vietnam Petroleum. In addition to that, Vnsteel Vicasa is 2.75 times more volatile than Vietnam Petroleum Transport. It trades about -0.11 of its total potential returns per unit of risk. Vietnam Petroleum Transport is currently generating about -0.05 per unit of volatility. If you would invest 1,440,000 in Vietnam Petroleum Transport on October 7, 2024 and sell it today you would lose (30,000) from holding Vietnam Petroleum Transport or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vnsteel Vicasa JSC vs. Vietnam Petroleum Transport
Performance |
| Timeline |
| Vnsteel Vicasa JSC |
| Vietnam Petroleum |
Vnsteel Vicasa and Vietnam Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vnsteel Vicasa and Vietnam Petroleum
The main advantage of trading using opposite Vnsteel Vicasa and Vietnam Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vnsteel Vicasa 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.| Vnsteel Vicasa vs. FIT INVEST JSC | Vnsteel Vicasa vs. Damsan JSC | Vnsteel Vicasa vs. An Phat Plastic | Vnsteel Vicasa vs. APG Securities Joint |
| Vietnam Petroleum vs. Petrolimex Petrochemical JSC | Vietnam Petroleum vs. Sao Vang Rubber | Vietnam Petroleum vs. Materials Petroleum JSC | Vietnam Petroleum vs. Ducgiang Chemicals Detergent |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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