Correlation Between Petrolimex Insurance and Petrolimex Petrochemical
Can any of the company-specific risk be diversified away by investing in both Petrolimex Insurance and Petrolimex Petrochemical 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 Petrolimex Petrochemical 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 Petrolimex Petrochemical JSC, you can compare the effects of market volatilities on Petrolimex Insurance and Petrolimex Petrochemical 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 Petrolimex Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Insurance and Petrolimex Petrochemical.
Diversification Opportunities for Petrolimex Insurance and Petrolimex Petrochemical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Petrolimex and Petrolimex is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Insurance Corp and Petrolimex Petrochemical JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Petrochemical 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 Petrolimex Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Petrochemical has no effect on the direction of Petrolimex Insurance i.e., Petrolimex Insurance and Petrolimex Petrochemical go up and down completely randomly.
Pair Corralation between Petrolimex Insurance and Petrolimex Petrochemical
Assuming the 90 days trading horizon Petrolimex Insurance is expected to generate 3.03 times less return on investment than Petrolimex Petrochemical. In addition to that, Petrolimex Insurance is 1.02 times more volatile than Petrolimex Petrochemical JSC. It trades about 0.0 of its total potential returns per unit of risk. Petrolimex Petrochemical JSC is currently generating about 0.01 per unit of volatility. If you would invest 2,018,710 in Petrolimex Petrochemical JSC on September 2, 2024 and sell it today you would earn a total of 41,290 from holding Petrolimex Petrochemical JSC or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 70.73% |
| Values | Daily Returns |
Petrolimex Insurance Corp vs. Petrolimex Petrochemical JSC
Performance |
| Timeline |
| Petrolimex Insurance Corp |
| Petrolimex Petrochemical |
Petrolimex Insurance and Petrolimex Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Insurance and Petrolimex Petrochemical
The main advantage of trading using opposite Petrolimex Insurance and Petrolimex Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Insurance position performs unexpectedly, Petrolimex Petrochemical 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 Petrochemical will offset losses from the drop in Petrolimex Petrochemical'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 |
| Petrolimex Petrochemical vs. FIT INVEST JSC | Petrolimex Petrochemical vs. Damsan JSC | Petrolimex Petrochemical vs. An Phat Plastic | Petrolimex Petrochemical vs. Alphanam ME |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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