Correlation Between Atesco Industrial and Petrovietnam Drilling
Can any of the company-specific risk be diversified away by investing in both Atesco Industrial 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 Atesco Industrial and Petrovietnam Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atesco Industrial Cartering and Petrovietnam Drilling Mud, you can compare the effects of market volatilities on Atesco Industrial 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 Atesco Industrial with a short position of Petrovietnam Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atesco Industrial and Petrovietnam Drilling.
Diversification Opportunities for Atesco Industrial and Petrovietnam Drilling
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atesco and Petrovietnam is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Atesco Industrial Cartering and Petrovietnam Drilling Mud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Drilling Mud and Atesco Industrial 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 Atesco Industrial Cartering 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 Mud has no effect on the direction of Atesco Industrial i.e., Atesco Industrial and Petrovietnam Drilling go up and down completely randomly.
Pair Corralation between Atesco Industrial and Petrovietnam Drilling
Assuming the 90 days trading horizon Atesco Industrial Cartering is expected to under-perform the Petrovietnam Drilling. In addition to that, Atesco Industrial is 6.83 times more volatile than Petrovietnam Drilling Mud. It trades about -0.15 of its total potential returns per unit of risk. Petrovietnam Drilling Mud is currently generating about 0.01 per unit of volatility. If you would invest 1,030,000 in Petrovietnam Drilling Mud on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Petrovietnam Drilling Mud or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.47% |
| Values | Daily Returns |
Atesco Industrial Cartering vs. Petrovietnam Drilling Mud
Performance |
| Timeline |
| Atesco Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Petrovietnam Drilling Mud |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Atesco Industrial and Petrovietnam Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atesco Industrial and Petrovietnam Drilling
The main advantage of trading using opposite Atesco Industrial and Petrovietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atesco Industrial 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.The idea behind Atesco Industrial Cartering and Petrovietnam Drilling Mud 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.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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