Correlation Between 3M and PETRO
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By analyzing existing cross correlation between 3M Company and PETRO CDA 7 percent, you can compare the effects of market volatilities on 3M and PETRO 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 3M with a short position of PETRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and PETRO.
Diversification Opportunities for 3M and PETRO
Very good diversification
The 3 months correlation between 3M and PETRO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and PETRO CDA 7 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PETRO CDA 7 and 3M 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 3M Company are associated (or correlated) with PETRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PETRO CDA 7 has no effect on the direction of 3M i.e., 3M and PETRO go up and down completely randomly.
Pair Corralation between 3M and PETRO
Considering the 90-day investment horizon 3M Company is expected to generate 2.23 times more return on investment than PETRO. However, 3M is 2.23 times more volatile than PETRO CDA 7 percent. It trades about 0.08 of its potential returns per unit of risk. PETRO CDA 7 percent is currently generating about 0.0 per unit of risk. If you would invest 7,898 in 3M Company on August 31, 2024 and sell it today you would earn a total of 5,455 from holding 3M Company or generate 69.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 36.63% |
| Values | Daily Returns |
3M Company vs. PETRO CDA 7 percent
Performance |
| Timeline |
| 3M Company |
| PETRO CDA 7 |
3M and PETRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and PETRO
The main advantage of trading using opposite 3M and PETRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, PETRO 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 PETRO will offset losses from the drop in PETRO's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
| PETRO vs. Merit Medical Systems | PETRO vs. BBB Foods | PETRO vs. Teleflex Incorporated | PETRO vs. Where Food Comes |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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