Correlation Between Vincom Retail and PetroVietnam Transportation
Can any of the company-specific risk be diversified away by investing in both Vincom Retail and PetroVietnam 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 Vincom Retail and PetroVietnam Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vincom Retail JSC and PetroVietnam Transportation Corp, you can compare the effects of market volatilities on Vincom Retail and PetroVietnam 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 Vincom Retail with a short position of PetroVietnam Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vincom Retail and PetroVietnam Transportation.
Diversification Opportunities for Vincom Retail and PetroVietnam Transportation
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vincom and PetroVietnam is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail JSC and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and Vincom Retail 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 Vincom Retail JSC are associated (or correlated) with PetroVietnam Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroVietnam Transportation has no effect on the direction of Vincom Retail i.e., Vincom Retail and PetroVietnam Transportation go up and down completely randomly.
Pair Corralation between Vincom Retail and PetroVietnam Transportation
Assuming the 90 days trading horizon Vincom Retail JSC is expected to generate 0.96 times more return on investment than PetroVietnam Transportation. However, Vincom Retail JSC is 1.04 times less risky than PetroVietnam Transportation. It trades about -0.14 of its potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.27 per unit of risk. If you would invest 1,715,000 in Vincom Retail JSC on October 29, 2024 and sell it today you would lose (60,000) from holding Vincom Retail JSC or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vincom Retail JSC vs. PetroVietnam Transportation Co
Performance |
| Timeline |
| Vincom Retail JSC |
| PetroVietnam Transportation |
Vincom Retail and PetroVietnam Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vincom Retail and PetroVietnam Transportation
The main advantage of trading using opposite Vincom Retail and PetroVietnam Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vincom Retail position performs unexpectedly, PetroVietnam 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 PetroVietnam Transportation will offset losses from the drop in PetroVietnam Transportation's long position.| Vincom Retail vs. Petrolimex Information Technology | Vincom Retail vs. South Books Educational | Vincom Retail vs. Techcom Vietnam REIT | Vincom Retail vs. South Basic Chemicals |
| PetroVietnam Transportation vs. FIT INVEST JSC | PetroVietnam Transportation vs. Damsan JSC | PetroVietnam Transportation vs. An Phat Plastic | PetroVietnam Transportation vs. APG Securities Joint |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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