Correlation Between Mobile World and Petrolimex International
Can any of the company-specific risk be diversified away by investing in both Mobile World and Petrolimex International 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 Mobile World and Petrolimex International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile World Investment and Petrolimex International Trading, you can compare the effects of market volatilities on Mobile World and Petrolimex International 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 Mobile World with a short position of Petrolimex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile World and Petrolimex International.
Diversification Opportunities for Mobile World and Petrolimex International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mobile and Petrolimex is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mobile World Investment and Petrolimex International Tradi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex International and Mobile World 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 Mobile World Investment are associated (or correlated) with Petrolimex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex International has no effect on the direction of Mobile World i.e., Mobile World and Petrolimex International go up and down completely randomly.
Pair Corralation between Mobile World and Petrolimex International
Assuming the 90 days trading horizon Mobile World Investment is expected to generate 0.77 times more return on investment than Petrolimex International. However, Mobile World Investment is 1.3 times less risky than Petrolimex International. It trades about 0.1 of its potential returns per unit of risk. Petrolimex International Trading is currently generating about -0.02 per unit of risk. If you would invest 3,928,770 in Mobile World Investment on September 12, 2024 and sell it today you would earn a total of 2,151,230 from holding Mobile World Investment or generate 54.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.73% |
| Values | Daily Returns |
Mobile World Investment vs. Petrolimex International Tradi
Performance |
| Timeline |
| Mobile World Investment |
| Petrolimex International |
Mobile World and Petrolimex International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile World and Petrolimex International
The main advantage of trading using opposite Mobile World and Petrolimex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile World position performs unexpectedly, Petrolimex International 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 International will offset losses from the drop in Petrolimex International's long position.| Mobile World vs. Post and Telecommunications | Mobile World vs. Elcom Technology Communications | Mobile World vs. BIDV Insurance Corp | Mobile World vs. Innovative Technology Development |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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