Correlation Between PetroVietnam Drilling and Petrovietnam Drilling

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

Diversification Opportunities for PetroVietnam Drilling and Petrovietnam Drilling

0.9

Correlation Coefficient

PetroVietnam Drilling  Petrovietnam Drilling

Almost no diversification

The 3 months correlation between PetroVietnam and Petrovietnam is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding PetroVietnam Drilling Well and Petrovietnam Drilling Mud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Drilling Mud 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 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 Mud has no effect on the direction of PetroVietnam Drilling i.e., PetroVietnam Drilling and Petrovietnam Drilling go up and down completely randomly.

Pair Corralation between PetroVietnam Drilling and Petrovietnam Drilling

Assuming the 90 days trading horizon PetroVietnam Drilling is expected to generate 2.12 times less return on investment than Petrovietnam Drilling. But when comparing it to its historical volatility, PetroVietnam Drilling Well is 1.57 times less risky than Petrovietnam Drilling. It trades about 0.11 of its potential returns per unit of risk. Petrovietnam Drilling Mud is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  920,000  in Petrovietnam Drilling Mud on May 8, 2025 and sell it today you would earn a total of  280,000  from holding Petrovietnam Drilling Mud or generate 30.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

PetroVietnam Drilling Well  vs.  Petrovietnam Drilling Mud

PetroVietnam Drilling

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in PetroVietnam Drilling Well are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, PetroVietnam Drilling displayed solid returns over the last few months and may actually be approaching a breakup point.

Petrovietnam Drilling Mud

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Petrovietnam Drilling Mud are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Petrovietnam Drilling displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PetroVietnam Drilling and Petrovietnam Drilling

The main advantage of trading using opposite PetroVietnam Drilling and Petrovietnam Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroVietnam Drilling 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.

The idea behind PetroVietnam Drilling Well and Petrovietnam Drilling Mud 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.