Correlation Between FIT INVEST and Petrolimex Petrochemical
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Petrolimex Petrochemical 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 FIT INVEST and Petrolimex Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIT INVEST JSC and Petrolimex Petrochemical JSC, you can compare the effects of market volatilities on FIT INVEST and Petrolimex Petrochemical 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 FIT INVEST with a short position of Petrolimex Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Petrolimex Petrochemical.
Diversification Opportunities for FIT INVEST and Petrolimex Petrochemical
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIT and Petrolimex is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Petrolimex Petrochemical JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Petrochemical and FIT INVEST 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 FIT INVEST JSC are associated (or correlated) with Petrolimex Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Petrochemical has no effect on the direction of FIT INVEST i.e., FIT INVEST and Petrolimex Petrochemical go up and down completely randomly.
Pair Corralation between FIT INVEST and Petrolimex Petrochemical
Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the Petrolimex Petrochemical. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 3.31 times less risky than Petrolimex Petrochemical. The stock trades about -0.28 of its potential returns per unit of risk. The Petrolimex Petrochemical JSC is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,270,000 in Petrolimex Petrochemical JSC on October 29, 2024 and sell it today you would earn a total of 190,000 from holding Petrolimex Petrochemical JSC or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
FIT INVEST JSC vs. Petrolimex Petrochemical JSC
Performance |
| Timeline |
| FIT INVEST JSC |
| Petrolimex Petrochemical |
FIT INVEST and Petrolimex Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Petrolimex Petrochemical
The main advantage of trading using opposite FIT INVEST and Petrolimex Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Petrolimex Petrochemical 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 Petrolimex Petrochemical will offset losses from the drop in Petrolimex Petrochemical's long position.| FIT INVEST vs. Techno Agricultural Supplying | FIT INVEST vs. Visicons Construction and | FIT INVEST vs. Industrial Urban Development | FIT INVEST vs. Transport and Industry |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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