Correlation Between Hoasen and Pacific Petroleum
Can any of the company-specific risk be diversified away by investing in both Hoasen and Pacific Petroleum 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 Hoasen and Pacific Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoasen Group and Pacific Petroleum Transportation, you can compare the effects of market volatilities on Hoasen and Pacific Petroleum 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 Hoasen with a short position of Pacific Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoasen and Pacific Petroleum.
Diversification Opportunities for Hoasen and Pacific Petroleum
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hoasen and Pacific is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hoasen Group and Pacific Petroleum Transportati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Petroleum and Hoasen 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 Hoasen Group are associated (or correlated) with Pacific Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Petroleum has no effect on the direction of Hoasen i.e., Hoasen and Pacific Petroleum go up and down completely randomly.
Pair Corralation between Hoasen and Pacific Petroleum
Assuming the 90 days trading horizon Hoasen Group is expected to under-perform the Pacific Petroleum. In addition to that, Hoasen is 1.64 times more volatile than Pacific Petroleum Transportation. It trades about -0.17 of its total potential returns per unit of risk. Pacific Petroleum Transportation is currently generating about -0.09 per unit of volatility. If you would invest 1,670,000 in Pacific Petroleum Transportation on September 12, 2024 and sell it today you would lose (35,000) from holding Pacific Petroleum Transportation or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoasen Group vs. Pacific Petroleum Transportati
Performance |
| Timeline |
| Hoasen Group |
| Pacific Petroleum |
Hoasen and Pacific Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoasen and Pacific Petroleum
The main advantage of trading using opposite Hoasen and Pacific Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoasen position performs unexpectedly, Pacific Petroleum 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 Pacific Petroleum will offset losses from the drop in Pacific Petroleum's long position.The idea behind Hoasen Group and Pacific Petroleum Transportation 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.| Pacific Petroleum vs. Vietnam Petroleum Transport | Pacific Petroleum vs. Post and Telecommunications | Pacific Petroleum vs. Thanh Dat Investment | Pacific Petroleum vs. Travel Investment and |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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