Correlation Between Vietnam Petroleum and Japan Vietnam
Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and Japan Vietnam 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 Japan Vietnam 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 Japan Vietnam Medical, you can compare the effects of market volatilities on Vietnam Petroleum and Japan Vietnam 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 Japan Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and Japan Vietnam.
Diversification Opportunities for Vietnam Petroleum and Japan Vietnam
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vietnam and Japan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and Japan Vietnam Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Vietnam Medical 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 Japan Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Vietnam Medical has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and Japan Vietnam go up and down completely randomly.
Pair Corralation between Vietnam Petroleum and Japan Vietnam
Assuming the 90 days trading horizon Vietnam Petroleum Transport is expected to generate 0.76 times more return on investment than Japan Vietnam. However, Vietnam Petroleum Transport is 1.31 times less risky than Japan Vietnam. It trades about -0.16 of its potential returns per unit of risk. Japan Vietnam Medical is currently generating about -0.23 per unit of risk. If you would invest 1,460,000 in Vietnam Petroleum Transport on January 14, 2025 and sell it today you would lose (150,000) from holding Vietnam Petroleum Transport or give up 10.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Petroleum Transport vs. Japan Vietnam Medical
Performance |
| Timeline |
| Vietnam Petroleum |
| Japan Vietnam Medical |
Vietnam Petroleum and Japan Vietnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Petroleum and Japan Vietnam
The main advantage of trading using opposite Vietnam Petroleum and Japan Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, Japan Vietnam 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 Japan Vietnam will offset losses from the drop in Japan Vietnam's long position.| Vietnam Petroleum vs. Transimex Transportation JSC | Vietnam Petroleum vs. FPT Digital Retail | Vietnam Petroleum vs. Vincom Retail JSC | Vietnam Petroleum vs. Pha Le Plastics |
| Japan Vietnam vs. Song Hong Construction | Japan Vietnam vs. Agriculture Printing and | Japan Vietnam vs. Ben Thanh Rubber | Japan Vietnam vs. Binh Minh Plastics |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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