Correlation Between PetroVietnam Drilling and Tng Investment

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

Diversification Opportunities for PetroVietnam Drilling and Tng Investment

-0.05

Correlation Coefficient

PetroVietnam Drilling  Tng Investment

Good diversification

The 3 months correlation between PetroVietnam and Tng is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Drilling Well and Tng Investment And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tng Investment And 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 Tng Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tng Investment And has no effect on the direction of PetroVietnam Drilling i.e., PetroVietnam Drilling and Tng Investment go up and down completely randomly.

Pair Corralation between PetroVietnam Drilling and Tng Investment

Assuming the 90 days trading horizon PetroVietnam Drilling is expected to generate 3.13 times less return on investment than Tng Investment. But when comparing it to its historical volatility, PetroVietnam Drilling Well is 1.19 times less risky than Tng Investment. It trades about 0.03 of its potential returns per unit of risk. Tng Investment And is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,056,528  in Tng Investment And on September 17, 2024 and sell it today you would earn a total of  1,513,472  from holding Tng Investment And or generate 143.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

PetroVietnam Drilling Well  vs.  Tng Investment And

PetroVietnam Drilling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PetroVietnam Drilling Well has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Tng Investment And

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tng Investment And are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Tng Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PetroVietnam Drilling and Tng Investment

The main advantage of trading using opposite PetroVietnam Drilling and Tng Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Drilling position performs unexpectedly, Tng Investment 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 Tng Investment will offset losses from the drop in Tng Investment's long position.

The idea behind PetroVietnam Drilling Well and Tng Investment And 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.