Correlation Between Petrovietnam Drilling and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both Petrovietnam Drilling and Damsan JSC 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 Petrovietnam Drilling and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrovietnam Drilling Mud and Damsan JSC, you can compare the effects of market volatilities on Petrovietnam Drilling and Damsan JSC 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 Petrovietnam Drilling with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrovietnam Drilling and Damsan JSC.
Diversification Opportunities for Petrovietnam Drilling and Damsan JSC
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Petrovietnam and Damsan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Petrovietnam Drilling Mud and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and Petrovietnam Drilling 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 Petrovietnam Drilling Mud are associated (or correlated) with Damsan JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damsan JSC has no effect on the direction of Petrovietnam Drilling i.e., Petrovietnam Drilling and Damsan JSC go up and down completely randomly.
Pair Corralation between Petrovietnam Drilling and Damsan JSC
Assuming the 90 days trading horizon Petrovietnam Drilling is expected to generate 1.08 times less return on investment than Damsan JSC. In addition to that, Petrovietnam Drilling is 1.04 times more volatile than Damsan JSC. It trades about 0.02 of its total potential returns per unit of risk. Damsan JSC is currently generating about 0.02 per unit of volatility. If you would invest 804,457 in Damsan JSC on September 12, 2024 and sell it today you would earn a total of 109,543 from holding Damsan JSC or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrovietnam Drilling Mud vs. Damsan JSC
Performance |
| Timeline |
| Petrovietnam Drilling Mud |
| Damsan JSC |
Petrovietnam Drilling and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrovietnam Drilling and Damsan JSC
The main advantage of trading using opposite Petrovietnam Drilling and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrovietnam Drilling position performs unexpectedly, Damsan JSC 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 Damsan JSC will offset losses from the drop in Damsan JSC's long position.| Petrovietnam Drilling vs. FIT INVEST JSC | Petrovietnam Drilling vs. Damsan JSC | Petrovietnam Drilling vs. An Phat Plastic | Petrovietnam Drilling vs. Alphanam ME |
| Damsan JSC vs. FIT INVEST JSC | Damsan JSC vs. An Phat Plastic | Damsan JSC vs. Alphanam ME | Damsan JSC vs. APG Securities Joint |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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