Correlation Between PVI Reinsurance and VietinBank Securities

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

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

Diversification Opportunities for PVI Reinsurance and VietinBank Securities

-0.39

Correlation Coefficient

PVI Reinsurance  VietinBank Securities

Very good diversification

The 3 months correlation between PVI and VietinBank is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PVI Reinsurance Corp and VietinBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VietinBank Securities JSC and PVI Reinsurance 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 PVI Reinsurance Corp are associated (or correlated) with VietinBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VietinBank Securities JSC has no effect on the direction of PVI Reinsurance i.e., PVI Reinsurance and VietinBank Securities go up and down completely randomly.

Pair Corralation between PVI Reinsurance and VietinBank Securities

Assuming the 90 days trading horizon PVI Reinsurance Corp is expected to under-perform the VietinBank Securities. But the stock apears to be less risky and, when comparing its historical volatility, PVI Reinsurance Corp is 2.52 times less risky than VietinBank Securities. The stock trades about -0.02 of its potential returns per unit of risk. The VietinBank Securities JSC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,240,000  in VietinBank Securities JSC on May 7, 2025 and sell it today you would earn a total of  825,000  from holding VietinBank Securities JSC or generate 25.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

PVI Reinsurance Corp  vs.  VietinBank Securities JSC

PVI Reinsurance Corp

Risk-Adjusted Performance

Weakest

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

VietinBank Securities JSC

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in VietinBank Securities JSC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, VietinBank Securities displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PVI Reinsurance and VietinBank Securities

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

The idea behind PVI Reinsurance Corp and VietinBank Securities JSC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..