Correlation Between PGE Corp and Petrofac
Can any of the company-specific risk be diversified away by investing in both PGE Corp and Petrofac 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 PGE Corp and Petrofac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGE Corp and Petrofac Ltd ADR, you can compare the effects of market volatilities on PGE Corp and Petrofac 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 PGE Corp with a short position of Petrofac. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGE Corp and Petrofac.
Diversification Opportunities for PGE Corp and Petrofac
Excellent diversification
The 3 months correlation between PGE and Petrofac is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PGE Corp and Petrofac Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrofac ADR and PGE Corp 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 PGE Corp are associated (or correlated) with Petrofac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrofac ADR has no effect on the direction of PGE Corp i.e., PGE Corp and Petrofac go up and down completely randomly.
Pair Corralation between PGE Corp and Petrofac
If you would invest 15,684 in PGE Corp on August 28, 2024 and sell it today you would earn a total of 0.00 from holding PGE Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
PGE Corp vs. Petrofac Ltd ADR
Performance |
| Timeline |
| PGE Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Petrofac ADR |
PGE Corp and Petrofac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGE Corp and Petrofac
The main advantage of trading using opposite PGE Corp and Petrofac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGE Corp position performs unexpectedly, Petrofac 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 Petrofac will offset losses from the drop in Petrofac's long position.The idea behind PGE Corp and Petrofac Ltd ADR 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.| Petrofac vs. Expro Group Holdings | Petrofac vs. ChampionX | Petrofac vs. Ranger Energy Services | Petrofac vs. Cactus Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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