Correlation Between Din Capital and PetroVietnam Drilling
Can any of the company-specific risk be diversified away by investing in both Din Capital 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 Din Capital and PetroVietnam Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and PetroVietnam Drilling Well, you can compare the effects of market volatilities on Din Capital 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 Din Capital with a short position of PetroVietnam Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and PetroVietnam Drilling.
Diversification Opportunities for Din Capital and PetroVietnam Drilling
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Din and PetroVietnam is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital 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 Din Capital 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 Din Capital 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 Din Capital i.e., Din Capital and PetroVietnam Drilling go up and down completely randomly.
Pair Corralation between Din Capital and PetroVietnam Drilling
Assuming the 90 days trading horizon Din Capital is expected to generate 3.73 times less return on investment than PetroVietnam Drilling. In addition to that, Din Capital is 1.2 times more volatile than PetroVietnam Drilling Well. It trades about 0.01 of its total potential returns per unit of risk. PetroVietnam Drilling Well is currently generating about 0.05 per unit of volatility. If you would invest 1,650,000 in PetroVietnam Drilling Well on September 2, 2024 and sell it today you would earn a total of 720,000 from holding PetroVietnam Drilling Well or generate 43.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.51% |
| Values | Daily Returns |
Din Capital Investment vs. PetroVietnam Drilling Well
Performance |
| Timeline |
| Din Capital Investment |
| PetroVietnam Drilling |
Din Capital and PetroVietnam Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Din Capital and PetroVietnam Drilling
The main advantage of trading using opposite Din Capital and PetroVietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital 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.| Din Capital vs. FIT INVEST JSC | Din Capital vs. Damsan JSC | Din Capital vs. An Phat Plastic | Din Capital vs. Alphanam ME |
| PetroVietnam Drilling vs. LDG Investment JSC | PetroVietnam Drilling vs. Thanh Dat Investment | PetroVietnam Drilling vs. 1369 Construction JSC | PetroVietnam Drilling vs. Vu Dang 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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