Correlation Between APG Securities and PetroVietnam Transportation

Can any of the company-specific risk be diversified away by investing in both APG Securities 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 APG Securities and PetroVietnam Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between APG Securities Joint and PetroVietnam Transportation Corp, you can compare the effects of market volatilities on APG Securities 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 APG Securities with a short position of PetroVietnam Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and PetroVietnam Transportation.

Diversification Opportunities for APG Securities and PetroVietnam Transportation

0.71

Correlation Coefficient

APG Securities  PetroVietnam Transportation

Poor diversification

The 3 months correlation between APG and PetroVietnam is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and APG Securities 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 APG Securities Joint 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 APG Securities i.e., APG Securities and PetroVietnam Transportation go up and down completely randomly.

Pair Corralation between APG Securities and PetroVietnam Transportation

Assuming the 90 days trading horizon APG Securities Joint is expected to generate 0.62 times more return on investment than PetroVietnam Transportation. However, APG Securities Joint is 1.62 times less risky than PetroVietnam Transportation. It trades about -0.13 of its potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about -0.16 per unit of risk. If you would invest  920,000  in APG Securities Joint on September 14, 2024 and sell it today you would lose (16,000) from holding APG Securities Joint or give up 1.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

APG Securities Joint  vs.  PetroVietnam Transportation Co

APG Securities Joint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APG Securities Joint has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, APG Securities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

PetroVietnam Transportation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PetroVietnam Transportation Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, PetroVietnam Transportation is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with APG Securities and PetroVietnam Transportation

The main advantage of trading using opposite APG Securities and PetroVietnam Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APG Securities 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.

The idea behind APG Securities Joint and PetroVietnam Transportation Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.