Correlation Between Vietnam Petroleum and Transimex Transportation
Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and Transimex Transportation 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 Transimex Transportation 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 Transimex Transportation JSC, you can compare the effects of market volatilities on Vietnam Petroleum and Transimex Transportation 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 Transimex Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and Transimex Transportation.
Diversification Opportunities for Vietnam Petroleum and Transimex Transportation
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vietnam and Transimex is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and Transimex Transportation JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transimex Transportation 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 Transimex Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transimex Transportation has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and Transimex Transportation go up and down completely randomly.
Pair Corralation between Vietnam Petroleum and Transimex Transportation
Assuming the 90 days trading horizon Vietnam Petroleum Transport is expected to generate 1.23 times more return on investment than Transimex Transportation. However, Vietnam Petroleum is 1.23 times more volatile than Transimex Transportation JSC. It trades about -0.06 of its potential returns per unit of risk. Transimex Transportation JSC is currently generating about -0.16 per unit of risk. If you would invest 1,440,000 in Vietnam Petroleum Transport on September 12, 2024 and sell it today you would lose (35,000) from holding Vietnam Petroleum Transport or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 69.57% |
| Values | Daily Returns |
Vietnam Petroleum Transport vs. Transimex Transportation JSC
Performance |
| Timeline |
| Vietnam Petroleum |
| Transimex Transportation |
Vietnam Petroleum and Transimex Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Petroleum and Transimex Transportation
The main advantage of trading using opposite Vietnam Petroleum and Transimex Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, Transimex Transportation 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 Transimex Transportation will offset losses from the drop in Transimex Transportation's long position.| Vietnam Petroleum vs. FIT INVEST JSC | Vietnam Petroleum vs. Damsan JSC | Vietnam Petroleum vs. An Phat Plastic | Vietnam Petroleum vs. Alphanam ME |
| Transimex Transportation vs. Song Hong Garment | Transimex Transportation vs. Alphanam ME | Transimex Transportation vs. Hochiminh City Metal | Transimex Transportation 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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