Correlation Between Petrovietnam Drilling and Viet Thanh
Can any of the company-specific risk be diversified away by investing in both Petrovietnam Drilling and Viet Thanh 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 Viet Thanh 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 Viet Thanh Plastic, you can compare the effects of market volatilities on Petrovietnam Drilling and Viet Thanh 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 Viet Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrovietnam Drilling and Viet Thanh.
Diversification Opportunities for Petrovietnam Drilling and Viet Thanh
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petrovietnam and Viet is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Petrovietnam Drilling Mud and Viet Thanh Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Thanh Plastic 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 Viet Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Thanh Plastic has no effect on the direction of Petrovietnam Drilling i.e., Petrovietnam Drilling and Viet Thanh go up and down completely randomly.
Pair Corralation between Petrovietnam Drilling and Viet Thanh
Assuming the 90 days trading horizon Petrovietnam Drilling Mud is expected to generate 2.38 times more return on investment than Viet Thanh. However, Petrovietnam Drilling is 2.38 times more volatile than Viet Thanh Plastic. It trades about 0.31 of its potential returns per unit of risk. Viet Thanh Plastic is currently generating about 0.49 per unit of risk. If you would invest 1,010,000 in Petrovietnam Drilling Mud on November 8, 2024 and sell it today you would earn a total of 80,000 from holding Petrovietnam Drilling Mud or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrovietnam Drilling Mud vs. Viet Thanh Plastic
Performance |
| Timeline |
| Petrovietnam Drilling Mud |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Viet Thanh Plastic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Petrovietnam Drilling and Viet Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrovietnam Drilling and Viet Thanh
The main advantage of trading using opposite Petrovietnam Drilling and Viet Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrovietnam Drilling position performs unexpectedly, Viet Thanh 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 Viet Thanh will offset losses from the drop in Viet Thanh's long position.| Petrovietnam Drilling vs. BaoMinh Insurance Corp | Petrovietnam Drilling vs. TDG Global Investment | Petrovietnam Drilling vs. Nam Long Investment | Petrovietnam Drilling vs. Truong Thanh Furniture |
| Viet Thanh vs. Phuoc Hoa Rubber | Viet Thanh vs. HVC Investment and | Viet Thanh vs. Pha Le Plastics | Viet Thanh vs. An Phat 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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