Correlation Between Petrolimex Insurance and DOMESCO Medical
Can any of the company-specific risk be diversified away by investing in both Petrolimex Insurance and DOMESCO Medical 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 DOMESCO Medical 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 DOMESCO Medical Import, you can compare the effects of market volatilities on Petrolimex Insurance and DOMESCO Medical 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 DOMESCO Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Insurance and DOMESCO Medical.
Diversification Opportunities for Petrolimex Insurance and DOMESCO Medical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petrolimex and DOMESCO is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Insurance Corp and DOMESCO Medical Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOMESCO Medical Import 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 DOMESCO Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOMESCO Medical Import has no effect on the direction of Petrolimex Insurance i.e., Petrolimex Insurance and DOMESCO Medical go up and down completely randomly.
Pair Corralation between Petrolimex Insurance and DOMESCO Medical
Assuming the 90 days trading horizon Petrolimex Insurance Corp is expected to generate 1.64 times more return on investment than DOMESCO Medical. However, Petrolimex Insurance is 1.64 times more volatile than DOMESCO Medical Import. It trades about 0.3 of its potential returns per unit of risk. DOMESCO Medical Import is currently generating about -0.12 per unit of risk. If you would invest 2,175,000 in Petrolimex Insurance Corp on September 2, 2024 and sell it today you would earn a total of 225,000 from holding Petrolimex Insurance Corp or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrolimex Insurance Corp vs. DOMESCO Medical Import
Performance |
| Timeline |
| Petrolimex Insurance Corp |
| DOMESCO Medical Import |
Petrolimex Insurance and DOMESCO Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Insurance and DOMESCO Medical
The main advantage of trading using opposite Petrolimex Insurance and DOMESCO Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Insurance position performs unexpectedly, DOMESCO Medical 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 DOMESCO Medical will offset losses from the drop in DOMESCO Medical's long position.| Petrolimex Insurance vs. FIT INVEST JSC | Petrolimex Insurance vs. Damsan JSC | Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance vs. Alphanam ME |
| DOMESCO Medical vs. Viet Thanh Plastic | DOMESCO Medical vs. Tri Viet Management | DOMESCO Medical vs. Hochiminh City Metal | DOMESCO Medical vs. South Basic Chemicals |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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