Correlation Between Damsan JSC and Petrovietnam Gas
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Petrovietnam Gas 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 Damsan JSC and Petrovietnam Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Petrovietnam Gas JSC, you can compare the effects of market volatilities on Damsan JSC and Petrovietnam Gas 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 Damsan JSC with a short position of Petrovietnam Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Petrovietnam Gas.
Diversification Opportunities for Damsan JSC and Petrovietnam Gas
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Damsan and Petrovietnam is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Petrovietnam Gas JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Gas JSC and Damsan JSC 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 Damsan JSC are associated (or correlated) with Petrovietnam Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrovietnam Gas JSC has no effect on the direction of Damsan JSC i.e., Damsan JSC and Petrovietnam Gas go up and down completely randomly.
Pair Corralation between Damsan JSC and Petrovietnam Gas
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Petrovietnam Gas. In addition to that, Damsan JSC is 1.65 times more volatile than Petrovietnam Gas JSC. It trades about -0.01 of its total potential returns per unit of risk. Petrovietnam Gas JSC is currently generating about -0.01 per unit of volatility. If you would invest 6,723,093 in Petrovietnam Gas JSC on January 23, 2025 and sell it today you would lose (973,093) from holding Petrovietnam Gas JSC or give up 14.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Petrovietnam Gas JSC
Performance |
| Timeline |
| Damsan JSC |
| Petrovietnam Gas JSC |
Damsan JSC and Petrovietnam Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Petrovietnam Gas
The main advantage of trading using opposite Damsan JSC and Petrovietnam Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Petrovietnam Gas 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 Gas will offset losses from the drop in Petrovietnam Gas' long position.| Damsan JSC vs. Elcom Technology Communications | Damsan JSC vs. PVI Reinsurance Corp | Damsan JSC vs. PostTelecommunication Equipment | Damsan JSC vs. IDJ FINANCIAL |
| Petrovietnam Gas vs. Fecon Mining JSC | Petrovietnam Gas vs. FPT Digital Retail | Petrovietnam Gas vs. Petrolimex Information Technology | Petrovietnam Gas vs. BIDV Insurance Corp |
Check out your portfolio center.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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