Correlation Between Vietnam Dairy and Petrolimex Information
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy and Petrolimex Information 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 Dairy and Petrolimex Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Dairy Products and Petrolimex Information Technology, you can compare the effects of market volatilities on Vietnam Dairy and Petrolimex Information 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 Dairy with a short position of Petrolimex Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Petrolimex Information.
Diversification Opportunities for Vietnam Dairy and Petrolimex Information
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vietnam and Petrolimex is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products and Petrolimex Information Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Information and Vietnam Dairy 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 Dairy Products are associated (or correlated) with Petrolimex Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Information has no effect on the direction of Vietnam Dairy i.e., Vietnam Dairy and Petrolimex Information go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Petrolimex Information
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to under-perform the Petrolimex Information. But the stock apears to be less risky and, when comparing its historical volatility, Vietnam Dairy Products is 1.96 times less risky than Petrolimex Information. The stock trades about -0.04 of its potential returns per unit of risk. The Petrolimex Information Technology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,720,000 in Petrolimex Information Technology on November 30, 2024 and sell it today you would earn a total of 230,000 from holding Petrolimex Information Technology or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 65.79% |
| Values | Daily Returns |
Vietnam Dairy Products vs. Petrolimex Information Technol
Performance |
| Timeline |
| Vietnam Dairy Products |
| Petrolimex Information |
Vietnam Dairy and Petrolimex Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Petrolimex Information
The main advantage of trading using opposite Vietnam Dairy and Petrolimex Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy position performs unexpectedly, Petrolimex Information 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 Petrolimex Information will offset losses from the drop in Petrolimex Information's long position.| Vietnam Dairy vs. Song Hong Aluminum | Vietnam Dairy vs. IDJ FINANCIAL | Vietnam Dairy vs. Pha Lai Thermal | Vietnam Dairy vs. Military Insurance Corp |
| Petrolimex Information vs. PetroVietnam Drilling Well | Petrolimex Information vs. Mobile World Investment | Petrolimex Information vs. Hai An Transport | Petrolimex Information vs. Binh Duong Trade |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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