Correlation Between PetroVietnam Transportation and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both PetroVietnam Transportation and Damsan JSC 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 Transportation and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroVietnam Transportation Corp and Damsan JSC, you can compare the effects of market volatilities on PetroVietnam Transportation and Damsan JSC 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 Transportation with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroVietnam Transportation and Damsan JSC.
Diversification Opportunities for PetroVietnam Transportation and Damsan JSC
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PetroVietnam and Damsan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Transportation Co and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and PetroVietnam Transportation 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 Transportation Corp are associated (or correlated) with Damsan JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damsan JSC has no effect on the direction of PetroVietnam Transportation i.e., PetroVietnam Transportation and Damsan JSC go up and down completely randomly.
Pair Corralation between PetroVietnam Transportation and Damsan JSC
Assuming the 90 days trading horizon PetroVietnam Transportation Corp is expected to generate 0.67 times more return on investment than Damsan JSC. However, PetroVietnam Transportation Corp is 1.48 times less risky than Damsan JSC. It trades about -0.05 of its potential returns per unit of risk. Damsan JSC is currently generating about -0.1 per unit of risk. If you would invest 2,933,118 in PetroVietnam Transportation Corp on October 30, 2024 and sell it today you would lose (323,118) from holding PetroVietnam Transportation Corp or give up 11.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroVietnam Transportation Co vs. Damsan JSC
Performance |
| Timeline |
| PetroVietnam Transportation |
| Damsan JSC |
PetroVietnam Transportation and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroVietnam Transportation and Damsan JSC
The main advantage of trading using opposite PetroVietnam Transportation and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Transportation position performs unexpectedly, Damsan JSC 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 Damsan JSC will offset losses from the drop in Damsan JSC's long position.| PetroVietnam Transportation vs. FIT INVEST JSC | PetroVietnam Transportation vs. Damsan JSC | PetroVietnam Transportation vs. An Phat Plastic | PetroVietnam Transportation vs. APG Securities Joint |
| Damsan JSC vs. Foreign Trade Development | Damsan JSC vs. Cotec Construction JSC | Damsan JSC vs. Vietnam Dairy Products | Damsan JSC vs. Binhthuan Agriculture Services |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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