Correlation Between Petrovietnam Drilling and CEO Group
Can any of the company-specific risk be diversified away by investing in both Petrovietnam Drilling and CEO Group 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 CEO Group 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 CEO Group JSC, you can compare the effects of market volatilities on Petrovietnam Drilling and CEO Group 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 CEO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrovietnam Drilling and CEO Group.
Diversification Opportunities for Petrovietnam Drilling and CEO Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrovietnam and CEO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Petrovietnam Drilling Mud and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group 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 CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of Petrovietnam Drilling i.e., Petrovietnam Drilling and CEO Group go up and down completely randomly.
Pair Corralation between Petrovietnam Drilling and CEO Group
Assuming the 90 days trading horizon Petrovietnam Drilling Mud is expected to generate 0.59 times more return on investment than CEO Group. However, Petrovietnam Drilling Mud is 1.7 times less risky than CEO Group. It trades about 0.01 of its potential returns per unit of risk. CEO Group JSC is currently generating about -0.01 per unit of risk. If you would invest 1,030,000 in Petrovietnam Drilling Mud on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Petrovietnam Drilling Mud or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrovietnam Drilling Mud vs. CEO Group JSC
Performance |
| Timeline |
| Petrovietnam Drilling Mud |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CEO Group JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Petrovietnam Drilling and CEO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrovietnam Drilling and CEO Group
The main advantage of trading using opposite Petrovietnam Drilling and CEO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrovietnam Drilling position performs unexpectedly, CEO Group 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 CEO Group will offset losses from the drop in CEO Group's long position.The idea behind Petrovietnam Drilling Mud and CEO Group JSC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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