Correlation Between Petrolimex Insurance and PetroVietnam Drilling
Can any of the company-specific risk be diversified away by investing in both Petrolimex Insurance 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 Petrolimex Insurance and PetroVietnam Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex Insurance Corp and PetroVietnam Drilling Well, you can compare the effects of market volatilities on Petrolimex Insurance 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 Petrolimex Insurance with a short position of PetroVietnam Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Insurance and PetroVietnam Drilling.
Diversification Opportunities for Petrolimex Insurance and PetroVietnam Drilling
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petrolimex and PetroVietnam is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Insurance Corp and PetroVietnam Drilling Well in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Drilling and Petrolimex Insurance 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 Petrolimex Insurance Corp 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 Petrolimex Insurance i.e., Petrolimex Insurance and PetroVietnam Drilling go up and down completely randomly.
Pair Corralation between Petrolimex Insurance and PetroVietnam Drilling
Assuming the 90 days trading horizon Petrolimex Insurance is expected to generate 2.49 times less return on investment than PetroVietnam Drilling. In addition to that, Petrolimex Insurance is 1.27 times more volatile than PetroVietnam Drilling Well. It trades about 0.0 of its total potential returns per unit of risk. PetroVietnam Drilling Well is currently generating about 0.01 per unit of volatility. If you would invest 2,365,000 in PetroVietnam Drilling Well on August 31, 2024 and sell it today you would earn a total of 5,000 from holding PetroVietnam Drilling Well or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.78% |
| Values | Daily Returns |
Petrolimex Insurance Corp vs. PetroVietnam Drilling Well
Performance |
| Timeline |
| Petrolimex Insurance Corp |
| PetroVietnam Drilling |
Petrolimex Insurance and PetroVietnam Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Insurance and PetroVietnam Drilling
The main advantage of trading using opposite Petrolimex Insurance and PetroVietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Insurance 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.| Petrolimex Insurance vs. FIT INVEST JSC | Petrolimex Insurance vs. Damsan JSC | Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance vs. Alphanam ME |
| PetroVietnam Drilling vs. Vietnam JSCmmercial Bank | PetroVietnam Drilling vs. Military Insurance Corp | PetroVietnam Drilling vs. Thanh Dat Investment | PetroVietnam Drilling vs. LDG Investment 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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