Correlation Between PetroVietnam Drilling and POST TELECOMMU

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Can any of the company-specific risk be diversified away by investing in both PetroVietnam Drilling and POST TELECOMMU 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 POST TELECOMMU 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 POST TELECOMMU, you can compare the effects of market volatilities on PetroVietnam Drilling and POST TELECOMMU 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 POST TELECOMMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Drilling and POST TELECOMMU.

Diversification Opportunities for PetroVietnam Drilling and POST TELECOMMU

PetroVietnamPOSTDiversified AwayPetroVietnamPOSTDiversified Away100%
-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between PetroVietnam and POST is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Drilling Well and POST TELECOMMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POST TELECOMMU 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 POST TELECOMMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POST TELECOMMU has no effect on the direction of PetroVietnam Drilling i.e., PetroVietnam Drilling and POST TELECOMMU go up and down completely randomly.

Pair Corralation between PetroVietnam Drilling and POST TELECOMMU

Assuming the 90 days trading horizon PetroVietnam Drilling is expected to generate 2.62 times less return on investment than POST TELECOMMU. In addition to that, PetroVietnam Drilling is 1.04 times more volatile than POST TELECOMMU. It trades about 0.13 of its total potential returns per unit of risk. POST TELECOMMU is currently generating about 0.35 per unit of volatility. If you would invest  2,210,000  in POST TELECOMMU on November 25, 2024 and sell it today you would earn a total of  120,000  from holding POST TELECOMMU or generate 5.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy94.12%
ValuesDaily Returns

PetroVietnam Drilling Well  vs.  POST TELECOMMU

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5051015
JavaScript chart by amCharts 3.21.15PVD PTI
       Timeline  
PetroVietnam Drilling 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in PetroVietnam Drilling Well are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, PetroVietnam Drilling is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22,00022,50023,00023,50024,00024,500
POST TELECOMMU 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in POST TELECOMMU are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, POST TELECOMMU displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb20,50021,00021,50022,00022,50023,00023,50024,000

PetroVietnam Drilling and POST TELECOMMU Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.07-3.05-2.03-1.010.01.052.13.154.2 0.050.100.150.20
JavaScript chart by amCharts 3.21.15PVD PTI
       Returns  

Pair Trading with PetroVietnam Drilling and POST TELECOMMU

The main advantage of trading using opposite PetroVietnam Drilling and POST TELECOMMU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Drilling position performs unexpectedly, POST TELECOMMU 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 POST TELECOMMU will offset losses from the drop in POST TELECOMMU's long position.
The idea behind PetroVietnam Drilling Well and POST TELECOMMU pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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