Correlation Between Vietnam Petroleum and International Gas
Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and International Gas 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 International Gas 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 International Gas Product, you can compare the effects of market volatilities on Vietnam Petroleum and International Gas 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 International Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and International Gas.
Diversification Opportunities for Vietnam Petroleum and International Gas
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vietnam and International is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and International Gas Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Gas Product 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 International Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Gas Product has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and International Gas go up and down completely randomly.
Pair Corralation between Vietnam Petroleum and International Gas
Assuming the 90 days trading horizon Vietnam Petroleum Transport is expected to generate 0.63 times more return on investment than International Gas. However, Vietnam Petroleum Transport is 1.58 times less risky than International Gas. It trades about 0.04 of its potential returns per unit of risk. International Gas Product is currently generating about -0.05 per unit of risk. If you would invest 1,116,316 in Vietnam Petroleum Transport on September 12, 2024 and sell it today you would earn a total of 318,684 from holding Vietnam Petroleum Transport or generate 28.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Vietnam Petroleum Transport vs. International Gas Product
Performance |
| Timeline |
| Vietnam Petroleum |
| International Gas Product |
Vietnam Petroleum and International Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Petroleum and International Gas
The main advantage of trading using opposite Vietnam Petroleum and International Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, International Gas 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 International Gas will offset losses from the drop in International Gas' long position.| Vietnam Petroleum vs. FIT INVEST JSC | Vietnam Petroleum vs. Damsan JSC | Vietnam Petroleum vs. An Phat Plastic | Vietnam Petroleum vs. Alphanam ME |
| International Gas vs. Post and Telecommunications | International Gas vs. Vietnam Petroleum Transport | International Gas vs. PostTelecommunication Equipment | International Gas vs. FPT Digital Retail |
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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