Correlation Between Vietnam Petroleum and Ha Noi
Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and Ha Noi 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 Vietnam Petroleum and Ha Noi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Petroleum Transport and Ha Noi Education, you can compare the effects of market volatilities on Vietnam Petroleum and Ha Noi 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 Vietnam Petroleum with a short position of Ha Noi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and Ha Noi.
Diversification Opportunities for Vietnam Petroleum and Ha Noi
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vietnam and EID is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and Ha Noi Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Noi Education and Vietnam Petroleum 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 Vietnam Petroleum Transport are associated (or correlated) with Ha Noi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Noi Education has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and Ha Noi go up and down completely randomly.
Pair Corralation between Vietnam Petroleum and Ha Noi
Assuming the 90 days trading horizon Vietnam Petroleum Transport is expected to generate 1.38 times more return on investment than Ha Noi. However, Vietnam Petroleum is 1.38 times more volatile than Ha Noi Education. It trades about 0.07 of its potential returns per unit of risk. Ha Noi Education is currently generating about 0.07 per unit of risk. If you would invest 732,488 in Vietnam Petroleum Transport on September 2, 2024 and sell it today you would earn a total of 687,512 from holding Vietnam Petroleum Transport or generate 93.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Vietnam Petroleum Transport vs. Ha Noi Education
Performance |
| Timeline |
| Vietnam Petroleum |
| Ha Noi Education |
Vietnam Petroleum and Ha Noi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Petroleum and Ha Noi
The main advantage of trading using opposite Vietnam Petroleum and Ha Noi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, Ha Noi 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 Ha Noi will offset losses from the drop in Ha Noi's long position.| Vietnam Petroleum vs. Everland Investment JSC | Vietnam Petroleum vs. Tin Nghia Industrial | Vietnam Petroleum vs. PV2 Investment JSC | Vietnam Petroleum vs. Vien Dong 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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