Correlation Between Petrovietnam Drilling and Saigon Viendong
Can any of the company-specific risk be diversified away by investing in both Petrovietnam Drilling and Saigon Viendong 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 Saigon Viendong 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 Saigon Viendong Technology, you can compare the effects of market volatilities on Petrovietnam Drilling and Saigon Viendong 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 Saigon Viendong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrovietnam Drilling and Saigon Viendong.
Diversification Opportunities for Petrovietnam Drilling and Saigon Viendong
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petrovietnam and Saigon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Petrovietnam Drilling Mud and Saigon Viendong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Viendong Tech 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 Saigon Viendong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Viendong Tech has no effect on the direction of Petrovietnam Drilling i.e., Petrovietnam Drilling and Saigon Viendong go up and down completely randomly.
Pair Corralation between Petrovietnam Drilling and Saigon Viendong
Assuming the 90 days trading horizon Petrovietnam Drilling Mud is expected to under-perform the Saigon Viendong. In addition to that, Petrovietnam Drilling is 1.42 times more volatile than Saigon Viendong Technology. It trades about -0.43 of its total potential returns per unit of risk. Saigon Viendong Technology is currently generating about 0.07 per unit of volatility. If you would invest 1,120,000 in Saigon Viendong Technology on August 30, 2024 and sell it today you would earn a total of 20,000 from holding Saigon Viendong Technology or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Petrovietnam Drilling Mud vs. Saigon Viendong Technology
Performance |
| Timeline |
| Petrovietnam Drilling Mud |
| Saigon Viendong Tech |
Petrovietnam Drilling and Saigon Viendong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrovietnam Drilling and Saigon Viendong
The main advantage of trading using opposite Petrovietnam Drilling and Saigon Viendong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrovietnam Drilling position performs unexpectedly, Saigon Viendong 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 Saigon Viendong will offset losses from the drop in Saigon Viendong'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 |
| Saigon Viendong vs. FIT INVEST JSC | Saigon Viendong vs. Damsan JSC | Saigon Viendong vs. An Phat Plastic | Saigon Viendong vs. Alphanam ME |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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