Correlation Between Viet Thanh and Petrolimex Petrochemical
Can any of the company-specific risk be diversified away by investing in both Viet Thanh and Petrolimex Petrochemical 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 Viet Thanh and Petrolimex Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Thanh Plastic and Petrolimex Petrochemical JSC, you can compare the effects of market volatilities on Viet Thanh and Petrolimex Petrochemical 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 Viet Thanh with a short position of Petrolimex Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Petrolimex Petrochemical.
Diversification Opportunities for Viet Thanh and Petrolimex Petrochemical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Viet and Petrolimex is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic and Petrolimex Petrochemical JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Petrochemical and Viet Thanh 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 Viet Thanh Plastic are associated (or correlated) with Petrolimex Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Petrochemical has no effect on the direction of Viet Thanh i.e., Viet Thanh and Petrolimex Petrochemical go up and down completely randomly.
Pair Corralation between Viet Thanh and Petrolimex Petrochemical
Assuming the 90 days trading horizon Viet Thanh is expected to generate 12.11 times less return on investment than Petrolimex Petrochemical. But when comparing it to its historical volatility, Viet Thanh Plastic is 1.94 times less risky than Petrolimex Petrochemical. It trades about 0.03 of its potential returns per unit of risk. Petrolimex Petrochemical JSC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,270,000 in Petrolimex Petrochemical JSC on October 30, 2024 and sell it today you would earn a total of 190,000 from holding Petrolimex Petrochemical JSC or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Petrolimex Petrochemical JSC
Performance |
| Timeline |
| Viet Thanh Plastic |
| Petrolimex Petrochemical |
Viet Thanh and Petrolimex Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Petrolimex Petrochemical
The main advantage of trading using opposite Viet Thanh and Petrolimex Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh position performs unexpectedly, Petrolimex Petrochemical 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 Petrochemical will offset losses from the drop in Petrolimex Petrochemical's long position.| Viet Thanh vs. Ben Thanh Rubber | Viet Thanh vs. Thong Nhat Rubber | Viet Thanh vs. Construction And Investment | Viet Thanh vs. Petrolimex International Trading |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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