Correlation Between PetroVietnam Drilling and Petrolimex Insurance
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Drilling and Petrolimex Insurance 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 Petrolimex Insurance 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 Petrolimex Insurance Corp, you can compare the effects of market volatilities on PetroVietnam Drilling and Petrolimex Insurance 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 Petrolimex Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Drilling and Petrolimex Insurance.
Diversification Opportunities for PetroVietnam Drilling and Petrolimex Insurance
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PetroVietnam and Petrolimex is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Drilling Well and Petrolimex Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Insurance Corp 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 Petrolimex Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Insurance Corp has no effect on the direction of PetroVietnam Drilling i.e., PetroVietnam Drilling and Petrolimex Insurance go up and down completely randomly.
Pair Corralation between PetroVietnam Drilling and Petrolimex Insurance
Assuming the 90 days trading horizon PetroVietnam Drilling Well is expected to generate 0.85 times more return on investment than Petrolimex Insurance. However, PetroVietnam Drilling Well is 1.17 times less risky than Petrolimex Insurance. It trades about 0.05 of its potential returns per unit of risk. Petrolimex Insurance Corp is currently generating about 0.0 per unit of risk. If you would invest 1,650,000 in PetroVietnam Drilling Well on September 2, 2024 and sell it today you would earn a total of 720,000 from holding PetroVietnam Drilling Well or generate 43.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.59% |
| Values | Daily Returns |
PetroVietnam Drilling Well vs. Petrolimex Insurance Corp
Performance |
| Timeline |
| PetroVietnam Drilling |
| Petrolimex Insurance Corp |
PetroVietnam Drilling and Petrolimex Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Drilling and Petrolimex Insurance
The main advantage of trading using opposite PetroVietnam Drilling and Petrolimex Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Drilling position performs unexpectedly, Petrolimex Insurance 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 Petrolimex Insurance will offset losses from the drop in Petrolimex Insurance's long position.| PetroVietnam Drilling vs. LDG Investment JSC | PetroVietnam Drilling vs. Thanh Dat Investment | PetroVietnam Drilling vs. 1369 Construction JSC | PetroVietnam Drilling vs. Vu Dang Investment |
| Petrolimex Insurance vs. FIT INVEST JSC | Petrolimex Insurance vs. Damsan JSC | Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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