Correlation Between Ha Long and PetroVietnam Drilling
Can any of the company-specific risk be diversified away by investing in both Ha Long 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 Ha Long and PetroVietnam Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ha Long Investment and PetroVietnam Drilling Well, you can compare the effects of market volatilities on Ha Long 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 Ha Long with a short position of PetroVietnam Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Long and PetroVietnam Drilling.
Diversification Opportunities for Ha Long and PetroVietnam Drilling
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HID and PetroVietnam is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ha Long Investment and PetroVietnam Drilling Well in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Drilling and Ha Long 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 Ha Long Investment 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 Ha Long i.e., Ha Long and PetroVietnam Drilling go up and down completely randomly.
Pair Corralation between Ha Long and PetroVietnam Drilling
Assuming the 90 days trading horizon Ha Long Investment is expected to generate 0.91 times more return on investment than PetroVietnam Drilling. However, Ha Long Investment is 1.1 times less risky than PetroVietnam Drilling. It trades about -0.03 of its potential returns per unit of risk. PetroVietnam Drilling Well is currently generating about -0.05 per unit of risk. If you would invest 325,000 in Ha Long Investment on January 20, 2025 and sell it today you would lose (62,000) from holding Ha Long Investment or give up 19.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ha Long Investment vs. PetroVietnam Drilling Well
Performance |
| Timeline |
| Ha Long Investment |
| PetroVietnam Drilling |
Ha Long and PetroVietnam Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ha Long and PetroVietnam Drilling
The main advantage of trading using opposite Ha Long and PetroVietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ha Long 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.| Ha Long vs. Telecoms Informatics JSC | Ha Long vs. Petrovietnam Technical Services | Ha Long vs. VTC Telecommunications JSC | Ha Long vs. Long An Food |
| PetroVietnam Drilling vs. Song Hong Aluminum | PetroVietnam Drilling vs. Petrolimex Information Technology | PetroVietnam Drilling vs. Military Insurance Corp | PetroVietnam Drilling vs. Danang Rubber JSC |
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 Stocks Directory module to find actively traded stocks across global markets.
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