Correlation Between Materials Petroleum and FIT INVEST
Can any of the company-specific risk be diversified away by investing in both Materials Petroleum and FIT INVEST 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 Materials Petroleum and FIT INVEST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materials Petroleum JSC and FIT INVEST JSC, you can compare the effects of market volatilities on Materials Petroleum and FIT INVEST 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 Materials Petroleum with a short position of FIT INVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materials Petroleum and FIT INVEST.
Diversification Opportunities for Materials Petroleum and FIT INVEST
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Materials and FIT is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Materials Petroleum JSC and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST JSC and Materials Petroleum 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 Materials Petroleum JSC are associated (or correlated) with FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of Materials Petroleum i.e., Materials Petroleum and FIT INVEST go up and down completely randomly.
Pair Corralation between Materials Petroleum and FIT INVEST
Assuming the 90 days trading horizon Materials Petroleum JSC is expected to generate 3.91 times more return on investment than FIT INVEST. However, Materials Petroleum is 3.91 times more volatile than FIT INVEST JSC. It trades about 0.0 of its potential returns per unit of risk. FIT INVEST JSC is currently generating about -0.12 per unit of risk. If you would invest 2,995,000 in Materials Petroleum JSC on August 28, 2024 and sell it today you would lose (55,000) from holding Materials Petroleum JSC or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Materials Petroleum JSC vs. FIT INVEST JSC
Performance |
| Timeline |
| Materials Petroleum JSC |
| FIT INVEST JSC |
Materials Petroleum and FIT INVEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materials Petroleum and FIT INVEST
The main advantage of trading using opposite Materials Petroleum and FIT INVEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materials Petroleum position performs unexpectedly, FIT INVEST 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 FIT INVEST will offset losses from the drop in FIT INVEST's long position.| Materials Petroleum vs. FIT INVEST JSC | Materials Petroleum vs. Damsan JSC | Materials Petroleum vs. An Phat Plastic | Materials Petroleum vs. APG Securities Joint |
| FIT INVEST vs. Hanoi Plastics JSC | FIT INVEST vs. Vietnam Rubber Group | FIT INVEST vs. PVI Reinsurance Corp | FIT INVEST vs. Pacific Petroleum Transportation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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