Correlation Between Petrolimex Insurance and Riverway Management
Can any of the company-specific risk be diversified away by investing in both Petrolimex Insurance and Riverway Management 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 Riverway Management 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 Riverway Management JSC, you can compare the effects of market volatilities on Petrolimex Insurance and Riverway Management 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 Riverway Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Insurance and Riverway Management.
Diversification Opportunities for Petrolimex Insurance and Riverway Management
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrolimex and Riverway is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Insurance Corp and Riverway Management JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverway Management JSC 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 Riverway Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverway Management JSC has no effect on the direction of Petrolimex Insurance i.e., Petrolimex Insurance and Riverway Management go up and down completely randomly.
Pair Corralation between Petrolimex Insurance and Riverway Management
Assuming the 90 days trading horizon Petrolimex Insurance Corp is expected to generate 0.47 times more return on investment than Riverway Management. However, Petrolimex Insurance Corp is 2.12 times less risky than Riverway Management. It trades about 0.1 of its potential returns per unit of risk. Riverway Management JSC is currently generating about -0.16 per unit of risk. If you would invest 2,250,000 in Petrolimex Insurance Corp on August 24, 2024 and sell it today you would earn a total of 50,000 from holding Petrolimex Insurance Corp or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Petrolimex Insurance Corp vs. Riverway Management JSC
Performance |
| Timeline |
| Petrolimex Insurance Corp |
| Riverway Management JSC |
Petrolimex Insurance and Riverway Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Insurance and Riverway Management
The main advantage of trading using opposite Petrolimex Insurance and Riverway Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Insurance position performs unexpectedly, Riverway Management 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 Riverway Management will offset losses from the drop in Riverway Management's long position.| Petrolimex Insurance vs. FIT INVEST JSC | Petrolimex Insurance vs. Damsan JSC | Petrolimex Insurance vs. An Phat Plastic | Petrolimex Insurance vs. APG Securities Joint |
| Riverway Management vs. Pacific Petroleum Transportation | Riverway Management vs. Hai An Transport | Riverway Management vs. Hochiminh City Metal | Riverway Management vs. Petrolimex Insurance Corp |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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