Correlation Between APG Securities and PetroVietnam Drilling
Can any of the company-specific risk be diversified away by investing in both APG Securities and PetroVietnam Drilling 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 APG Securities and PetroVietnam Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APG Securities Joint and PetroVietnam Drilling Well, you can compare the effects of market volatilities on APG Securities and PetroVietnam Drilling 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 APG Securities with a short position of PetroVietnam Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and PetroVietnam Drilling.
Diversification Opportunities for APG Securities and PetroVietnam Drilling
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between APG and PetroVietnam is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint and PetroVietnam Drilling Well in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Drilling and APG Securities 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 APG Securities Joint are associated (or correlated) with PetroVietnam Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroVietnam Drilling has no effect on the direction of APG Securities i.e., APG Securities and PetroVietnam Drilling go up and down completely randomly.
Pair Corralation between APG Securities and PetroVietnam Drilling
Assuming the 90 days trading horizon APG Securities Joint is expected to under-perform the PetroVietnam Drilling. But the stock apears to be less risky and, when comparing its historical volatility, APG Securities Joint is 3.02 times less risky than PetroVietnam Drilling. The stock trades about -0.18 of its potential returns per unit of risk. The PetroVietnam Drilling Well is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,420,000 in PetroVietnam Drilling Well on September 13, 2024 and sell it today you would earn a total of 115,000 from holding PetroVietnam Drilling Well or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APG Securities Joint vs. PetroVietnam Drilling Well
Performance |
| Timeline |
| APG Securities Joint |
| PetroVietnam Drilling |
APG Securities and PetroVietnam Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APG Securities and PetroVietnam Drilling
The main advantage of trading using opposite APG Securities and PetroVietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APG Securities position performs unexpectedly, PetroVietnam Drilling 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 Drilling will offset losses from the drop in PetroVietnam Drilling's long position.| APG Securities vs. FIT INVEST JSC | APG Securities vs. Damsan JSC | APG Securities vs. An Phat Plastic | APG Securities vs. Alphanam ME |
| PetroVietnam Drilling vs. FIT INVEST JSC | PetroVietnam Drilling vs. Damsan JSC | PetroVietnam Drilling vs. An Phat Plastic | PetroVietnam Drilling vs. Alphanam ME |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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