Correlation Between Petrovietnam Drilling and Pha Le
Can any of the company-specific risk be diversified away by investing in both Petrovietnam Drilling and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on Petrovietnam Drilling and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrovietnam Drilling and Pha Le.
Diversification Opportunities for Petrovietnam Drilling and Pha Le
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petrovietnam and Pha is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Petrovietnam Drilling Mud and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of Petrovietnam Drilling i.e., Petrovietnam Drilling and Pha Le go up and down completely randomly.
Pair Corralation between Petrovietnam Drilling and Pha Le
Assuming the 90 days trading horizon Petrovietnam Drilling is expected to generate 1.04 times less return on investment than Pha Le. In addition to that, Petrovietnam Drilling is 1.27 times more volatile than Pha Le Plastics. It trades about 0.01 of its total potential returns per unit of risk. Pha Le Plastics is currently generating about 0.02 per unit of volatility. If you would invest 467,000 in Pha Le Plastics on October 30, 2024 and sell it today you would earn a total of 33,000 from holding Pha Le Plastics or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Petrovietnam Drilling Mud vs. Pha Le Plastics
Performance |
| Timeline |
| Petrovietnam Drilling Mud |
| Pha Le Plastics |
Petrovietnam Drilling and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrovietnam Drilling and Pha Le
The main advantage of trading using opposite Petrovietnam Drilling and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrovietnam Drilling position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le's long position.| Petrovietnam Drilling vs. BaoMinh Insurance Corp | Petrovietnam Drilling vs. Industrial Urban Development | Petrovietnam Drilling vs. BIDV Insurance Corp | Petrovietnam Drilling vs. Ha Noi Education |
| Pha Le vs. Japan Vietnam Medical | Pha Le vs. Hanoi Plastics JSC | Pha Le vs. An Phat Plastic | Pha Le vs. Tien Phong Plastic |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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