Correlation Between Tien Phong and PetroVietnam Transportation

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

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

Diversification Opportunities for Tien Phong and PetroVietnam Transportation

0.82

Correlation Coefficient

Tien Phong  PetroVietnam Transportation

Very poor diversification

The 3 months correlation between Tien and PetroVietnam is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tien Phong Plastic and PetroVietnam Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Transportation and Tien Phong 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 Tien Phong Plastic 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 Tien Phong i.e., Tien Phong and PetroVietnam Transportation go up and down completely randomly.

Pair Corralation between Tien Phong and PetroVietnam Transportation

Assuming the 90 days trading horizon Tien Phong is expected to generate 1.29 times less return on investment than PetroVietnam Transportation. In addition to that, Tien Phong is 1.19 times more volatile than PetroVietnam Transportation Corp. It trades about 0.07 of its total potential returns per unit of risk. PetroVietnam Transportation Corp is currently generating about 0.11 per unit of volatility. If you would invest  1,636,364  in PetroVietnam Transportation Corp on May 6, 2025 and sell it today you would earn a total of  173,636  from holding PetroVietnam Transportation Corp or generate 10.61% return on investment over 90 days.

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

Tien Phong Plastic  vs.  PetroVietnam Transportation Co

Tien Phong Plastic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Phong Plastic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tien Phong may actually be approaching a critical reversion point that can send shares even higher in September 2025.

PetroVietnam Transportation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PetroVietnam Transportation Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, PetroVietnam Transportation may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tien Phong and PetroVietnam Transportation

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