Correlation Between Vietnam Petroleum and Vu Dang
Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and Vu Dang 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 Vu Dang 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 Vu Dang Investment, you can compare the effects of market volatilities on Vietnam Petroleum and Vu Dang 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 Vu Dang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and Vu Dang.
Diversification Opportunities for Vietnam Petroleum and Vu Dang
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vietnam and SVD is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and Vu Dang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vu Dang Investment 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 Vu Dang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vu Dang Investment has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and Vu Dang go up and down completely randomly.
Pair Corralation between Vietnam Petroleum and Vu Dang
Assuming the 90 days trading horizon Vietnam Petroleum Transport is expected to generate 0.56 times more return on investment than Vu Dang. However, Vietnam Petroleum Transport is 1.77 times less risky than Vu Dang. It trades about 0.01 of its potential returns per unit of risk. Vu Dang Investment is currently generating about -0.06 per unit of risk. If you would invest 1,410,000 in Vietnam Petroleum Transport on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Vietnam Petroleum Transport or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Petroleum Transport vs. Vu Dang Investment
Performance |
| Timeline |
| Vietnam Petroleum |
| Vu Dang Investment |
Vietnam Petroleum and Vu Dang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Petroleum and Vu Dang
The main advantage of trading using opposite Vietnam Petroleum and Vu Dang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, Vu Dang 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 Vu Dang will offset losses from the drop in Vu Dang'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 |
| Vu Dang vs. Visicons Construction and | Vu Dang vs. IDJ FINANCIAL | Vu Dang vs. Binh Duong Construction | Vu Dang vs. BIDV Insurance Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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