Correlation Between Saigon Viendong and PetroVietnam Drilling
Can any of the company-specific risk be diversified away by investing in both Saigon Viendong and PetroVietnam Drilling 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 Saigon Viendong and PetroVietnam Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saigon Viendong Technology and PetroVietnam Drilling Well, you can compare the effects of market volatilities on Saigon Viendong and PetroVietnam Drilling 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 Saigon Viendong with a short position of PetroVietnam Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Viendong and PetroVietnam Drilling.
Diversification Opportunities for Saigon Viendong and PetroVietnam Drilling
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saigon and PetroVietnam is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Viendong Technology and PetroVietnam Drilling Well in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroVietnam Drilling and Saigon Viendong 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 Saigon Viendong Technology are associated (or correlated) with PetroVietnam Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroVietnam Drilling has no effect on the direction of Saigon Viendong i.e., Saigon Viendong and PetroVietnam Drilling go up and down completely randomly.
Pair Corralation between Saigon Viendong and PetroVietnam Drilling
Assuming the 90 days trading horizon Saigon Viendong Technology is expected to generate 2.05 times more return on investment than PetroVietnam Drilling. However, Saigon Viendong is 2.05 times more volatile than PetroVietnam Drilling Well. It trades about -0.01 of its potential returns per unit of risk. PetroVietnam Drilling Well is currently generating about -0.22 per unit of risk. If you would invest 1,155,000 in Saigon Viendong Technology on October 12, 2024 and sell it today you would lose (15,000) from holding Saigon Viendong Technology or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Saigon Viendong Technology vs. PetroVietnam Drilling Well
Performance |
| Timeline |
| Saigon Viendong Tech |
| PetroVietnam Drilling |
Saigon Viendong and PetroVietnam Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Viendong and PetroVietnam Drilling
The main advantage of trading using opposite Saigon Viendong and PetroVietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Viendong position performs unexpectedly, PetroVietnam Drilling 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 PetroVietnam Drilling will offset losses from the drop in PetroVietnam Drilling's long position.| Saigon Viendong vs. FIT INVEST JSC | Saigon Viendong vs. Damsan JSC | Saigon Viendong vs. An Phat Plastic | Saigon Viendong 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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