Correlation Between Vietnam Petroleum and Book
Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and Book 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 Book 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 Book And Educational, you can compare the effects of market volatilities on Vietnam Petroleum and Book 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 Book. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and Book.
Diversification Opportunities for Vietnam Petroleum and Book
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vietnam and Book is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and Book And Educational in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Book And Educational 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 Book. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Book And Educational has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and Book go up and down completely randomly.
Pair Corralation between Vietnam Petroleum and Book
Assuming the 90 days trading horizon Vietnam Petroleum is expected to generate 69.37 times less return on investment than Book. In addition to that, Vietnam Petroleum is 1.02 times more volatile than Book And Educational. It trades about 0.01 of its total potential returns per unit of risk. Book And Educational is currently generating about 0.5 per unit of volatility. If you would invest 1,700,000 in Book And Educational on November 3, 2024 and sell it today you would earn a total of 50,000 from holding Book And Educational or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.22% |
| Values | Daily Returns |
Vietnam Petroleum Transport vs. Book And Educational
Performance |
| Timeline |
| Vietnam Petroleum |
| Book And Educational |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Vietnam Petroleum and Book Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Petroleum and Book
The main advantage of trading using opposite Vietnam Petroleum and Book positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, Book 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 Book will offset losses from the drop in Book's long position.| Vietnam Petroleum vs. Tin Nghia Industrial | Vietnam Petroleum vs. Viettel Construction JSC | Vietnam Petroleum vs. Hung Hau Agricultural | Vietnam Petroleum vs. Nam Kim Steel |
| Book vs. Idico JSC | Book vs. Vietnam Medicinal Materials | Book vs. Hochiminh City Metal | Book vs. Atesco Industrial Cartering |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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