Correlation Between Vietnam Petroleum and Transport
Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and Transport 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 Transport 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 Transport and Industry, you can compare the effects of market volatilities on Vietnam Petroleum and Transport 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 Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and Transport.
Diversification Opportunities for Vietnam Petroleum and Transport
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vietnam and Transport is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and Transport and Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and Industry 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 Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport and Industry has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and Transport go up and down completely randomly.
Pair Corralation between Vietnam Petroleum and Transport
Assuming the 90 days trading horizon Vietnam Petroleum Transport is expected to generate 0.92 times more return on investment than Transport. However, Vietnam Petroleum Transport is 1.08 times less risky than Transport. It trades about 0.41 of its potential returns per unit of risk. Transport and Industry is currently generating about 0.15 per unit of risk. If you would invest 1,430,000 in Vietnam Petroleum Transport on November 28, 2024 and sell it today you would earn a total of 195,000 from holding Vietnam Petroleum Transport or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Petroleum Transport vs. Transport and Industry
Performance |
| Timeline |
| Vietnam Petroleum |
| Transport and Industry |
Vietnam Petroleum and Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Petroleum and Transport
The main advantage of trading using opposite Vietnam Petroleum and Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, Transport 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 Transport will offset losses from the drop in Transport's long position.| Vietnam Petroleum vs. Pacific Petroleum Transportation | Vietnam Petroleum vs. Taseco Air Services | Vietnam Petroleum vs. Ducgiang Chemicals Detergent | Vietnam Petroleum vs. Transimex Transportation JSC |
| Transport vs. FIT INVEST JSC | Transport vs. Damsan JSC | Transport vs. An Phat Plastic | Transport vs. Alphanam ME |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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