Correlation Between Vietnam Petroleum and Bentre Aquaproduct

Can any of the company-specific risk be diversified away by investing in both Vietnam Petroleum and Bentre Aquaproduct 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 Bentre Aquaproduct 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 Bentre Aquaproduct Import, you can compare the effects of market volatilities on Vietnam Petroleum and Bentre Aquaproduct 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 Bentre Aquaproduct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Petroleum and Bentre Aquaproduct.

Diversification Opportunities for Vietnam Petroleum and Bentre Aquaproduct

-0.53

Correlation Coefficient

Vietnam Petroleum  Bentre Aquaproduct

Excellent diversification

The 3 months correlation between Vietnam and Bentre is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Petroleum Transport and Bentre Aquaproduct Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bentre Aquaproduct Import 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 Bentre Aquaproduct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bentre Aquaproduct Import has no effect on the direction of Vietnam Petroleum i.e., Vietnam Petroleum and Bentre Aquaproduct go up and down completely randomly.

Pair Corralation between Vietnam Petroleum and Bentre Aquaproduct

Assuming the 90 days trading horizon Vietnam Petroleum is expected to generate 12.11 times less return on investment than Bentre Aquaproduct. In addition to that, Vietnam Petroleum is 1.4 times more volatile than Bentre Aquaproduct Import. It trades about 0.0 of its total potential returns per unit of risk. Bentre Aquaproduct Import is currently generating about 0.07 per unit of volatility. If you would invest  3,500,000  in Bentre Aquaproduct Import on September 15, 2024 and sell it today you would earn a total of  410,000  from holding Bentre Aquaproduct Import or generate 11.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.47%
Values	Daily Returns

Vietnam Petroleum Transport  vs.  Bentre Aquaproduct Import

Vietnam Petroleum

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vietnam Petroleum Transport are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vietnam Petroleum displayed solid returns over the last few months and may actually be approaching a breakup point.

Bentre Aquaproduct Import

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bentre Aquaproduct Import has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Vietnam Petroleum and Bentre Aquaproduct

The main advantage of trading using opposite Vietnam Petroleum and Bentre Aquaproduct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Petroleum position performs unexpectedly, Bentre Aquaproduct 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 Bentre Aquaproduct will offset losses from the drop in Bentre Aquaproduct's long position.

The idea behind Vietnam Petroleum Transport and Bentre Aquaproduct Import 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.