Correlation Between Ba Ria and Petrovietnam Drilling
Can any of the company-specific risk be diversified away by investing in both Ba Ria 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 Ba Ria and Petrovietnam Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ba Ria Thermal and Petrovietnam Drilling Mud, you can compare the effects of market volatilities on Ba Ria 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 Ba Ria with a short position of Petrovietnam Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ba Ria and Petrovietnam Drilling.
Diversification Opportunities for Ba Ria and Petrovietnam Drilling
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BTP and Petrovietnam is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal 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 Ba Ria 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 Ba Ria Thermal 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 Ba Ria i.e., Ba Ria and Petrovietnam Drilling go up and down completely randomly.
Pair Corralation between Ba Ria and Petrovietnam Drilling
Assuming the 90 days trading horizon Ba Ria Thermal is expected to generate 0.65 times more return on investment than Petrovietnam Drilling. However, Ba Ria Thermal is 1.53 times less risky than Petrovietnam Drilling. It trades about 0.02 of its potential returns per unit of risk. Petrovietnam Drilling Mud is currently generating about 0.01 per unit of risk. If you would invest 1,060,856 in Ba Ria Thermal on October 30, 2024 and sell it today you would earn a total of 129,144 from holding Ba Ria Thermal or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Ba Ria Thermal vs. Petrovietnam Drilling Mud
Performance |
| Timeline |
| Ba Ria Thermal |
| Petrovietnam Drilling Mud |
Ba Ria and Petrovietnam Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ba Ria and Petrovietnam Drilling
The main advantage of trading using opposite Ba Ria and Petrovietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ba Ria 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.| Ba Ria vs. FIT INVEST JSC | Ba Ria vs. Damsan JSC | Ba Ria vs. An Phat Plastic | Ba Ria vs. APG Securities Joint |
| Petrovietnam Drilling vs. BaoMinh Insurance Corp | Petrovietnam Drilling vs. Industrial Urban Development | Petrovietnam Drilling vs. BIDV Insurance Corp | Petrovietnam Drilling vs. Ha Noi Education |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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