Correlation Between Song Hong and Petrovietnam Drilling
Can any of the company-specific risk be diversified away by investing in both Song Hong 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 Song Hong and Petrovietnam Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Hong Aluminum and Petrovietnam Drilling Mud, you can compare the effects of market volatilities on Song Hong 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 Song Hong with a short position of Petrovietnam Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Hong and Petrovietnam Drilling.
Diversification Opportunities for Song Hong and Petrovietnam Drilling
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Song and Petrovietnam is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Song Hong Aluminum 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 Song Hong 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 Song Hong Aluminum 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 Song Hong i.e., Song Hong and Petrovietnam Drilling go up and down completely randomly.
Pair Corralation between Song Hong and Petrovietnam Drilling
Assuming the 90 days trading horizon Song Hong Aluminum is expected to generate 1.2 times more return on investment than Petrovietnam Drilling. However, Song Hong is 1.2 times more volatile than Petrovietnam Drilling Mud. It trades about 0.02 of its potential returns per unit of risk. Petrovietnam Drilling Mud is currently generating about 0.02 per unit of risk. If you would invest 420,000 in Song Hong Aluminum on August 31, 2024 and sell it today you would earn a total of 30,000 from holding Song Hong Aluminum or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Hong Aluminum vs. Petrovietnam Drilling Mud
Performance |
| Timeline |
| Song Hong Aluminum |
| Petrovietnam Drilling Mud |
Song Hong and Petrovietnam Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Hong and Petrovietnam Drilling
The main advantage of trading using opposite Song Hong and Petrovietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Hong 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.| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. Alphanam ME |
| Petrovietnam Drilling vs. Thanh Dat Investment | Petrovietnam Drilling vs. Everland Investment JSC | Petrovietnam Drilling vs. Song Hong Aluminum | Petrovietnam Drilling vs. Century Synthetic Fiber |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |