Correlation Between PetroVietnam Drilling and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Drilling and Elcom Technology 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 Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroVietnam Drilling Well and Elcom Technology Communications, you can compare the effects of market volatilities on PetroVietnam Drilling and Elcom Technology 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 Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Drilling and Elcom Technology.
Diversification Opportunities for PetroVietnam Drilling and Elcom Technology
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroVietnam and Elcom is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Drilling Well and Elcom Technology Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcom Technology Com 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 Well are associated (or correlated) with Elcom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcom Technology Com has no effect on the direction of PetroVietnam Drilling i.e., PetroVietnam Drilling and Elcom Technology go up and down completely randomly.
Pair Corralation between PetroVietnam Drilling and Elcom Technology
Assuming the 90 days trading horizon PetroVietnam Drilling Well is expected to under-perform the Elcom Technology. But the stock apears to be less risky and, when comparing its historical volatility, PetroVietnam Drilling Well is 1.2 times less risky than Elcom Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Elcom Technology Communications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,695,000 in Elcom Technology Communications on October 30, 2024 and sell it today you would earn a total of 90,000 from holding Elcom Technology Communications or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroVietnam Drilling Well vs. Elcom Technology Communication
Performance |
| Timeline |
| PetroVietnam Drilling |
| Elcom Technology Com |
PetroVietnam Drilling and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Drilling and Elcom Technology
The main advantage of trading using opposite PetroVietnam Drilling and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Drilling position performs unexpectedly, Elcom Technology 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 Elcom Technology will offset losses from the drop in Elcom Technology's long position.| PetroVietnam Drilling vs. FIT INVEST JSC | PetroVietnam Drilling vs. Damsan JSC | PetroVietnam Drilling vs. An Phat Plastic | PetroVietnam Drilling vs. APG Securities Joint |
| Elcom Technology vs. FIT INVEST JSC | Elcom Technology vs. Damsan JSC | Elcom Technology vs. An Phat Plastic | Elcom Technology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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