Correlation Between Tin Nghia and Petrovietnam Technical

Can any of the company-specific risk be diversified away by investing in both Tin Nghia and Petrovietnam Technical 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 Tin Nghia and Petrovietnam Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tin Nghia Industrial and Petrovietnam Technical Services, you can compare the effects of market volatilities on Tin Nghia and Petrovietnam Technical 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 Tin Nghia with a short position of Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tin Nghia and Petrovietnam Technical.

Diversification Opportunities for Tin Nghia and Petrovietnam Technical

0.61

Correlation Coefficient

Tin Nghia  Petrovietnam Technical

Poor diversification

The 3 months correlation between Tin and Petrovietnam is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tin Nghia Industrial and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical and Tin Nghia 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 Tin Nghia Industrial are associated (or correlated) with Petrovietnam Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrovietnam Technical has no effect on the direction of Tin Nghia i.e., Tin Nghia and Petrovietnam Technical go up and down completely randomly.

Pair Corralation between Tin Nghia and Petrovietnam Technical

Assuming the 90 days trading horizon Tin Nghia is expected to generate 1.7 times less return on investment than Petrovietnam Technical. But when comparing it to its historical volatility, Tin Nghia Industrial is 2.04 times less risky than Petrovietnam Technical. It trades about 0.2 of its potential returns per unit of risk. Petrovietnam Technical Services is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,660,000  in Petrovietnam Technical Services on May 7, 2025 and sell it today you would earn a total of  770,000  from holding Petrovietnam Technical Services or generate 28.95% return on investment over 90 days.

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

Tin Nghia Industrial  vs.  Petrovietnam Technical Service

Tin Nghia Industrial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tin Nghia Industrial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tin Nghia displayed solid returns over the last few months and may actually be approaching a breakup point.

Petrovietnam Technical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Petrovietnam Technical Services are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Petrovietnam Technical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tin Nghia and Petrovietnam Technical

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

The idea behind Tin Nghia Industrial and Petrovietnam Technical Services 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.