Correlation Between Petrolimex Insurance and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Petrolimex Insurance and Dow Jones 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 Petrolimex Insurance and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex Insurance Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Petrolimex Insurance and Dow Jones 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 Petrolimex Insurance with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Insurance and Dow Jones.
Diversification Opportunities for Petrolimex Insurance and Dow Jones
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petrolimex and Dow is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Insurance Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Petrolimex Insurance 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 Petrolimex Insurance Corp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Petrolimex Insurance i.e., Petrolimex Insurance and Dow Jones go up and down completely randomly.
Pair Corralation between Petrolimex Insurance and Dow Jones
Assuming the 90 days trading horizon Petrolimex Insurance Corp is expected to generate 1.43 times more return on investment than Dow Jones. However, Petrolimex Insurance is 1.43 times more volatile than Dow Jones Industrial. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of risk. If you would invest 2,265,000 in Petrolimex Insurance Corp on August 25, 2024 and sell it today you would earn a total of 85,000 from holding Petrolimex Insurance Corp or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Petrolimex Insurance Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Petrolimex Insurance and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Petrolimex Insurance Corp
Pair trading matchups for Petrolimex Insurance
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Petrolimex Insurance and Dow Jones
The main advantage of trading using opposite Petrolimex Insurance and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Insurance position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance vs. VTC Telecommunications JSC | Petrolimex Insurance vs. RangDong Plastic JSC | Petrolimex Insurance vs. Viet Thanh Plastic |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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