Correlation Between Petrolimex Insurance and Post
Can any of the company-specific risk be diversified away by investing in both Petrolimex Insurance and Post 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 Post 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 Post and Telecommunications, you can compare the effects of market volatilities on Petrolimex Insurance and Post 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 Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Insurance and Post.
Diversification Opportunities for Petrolimex Insurance and Post
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrolimex and Post is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Insurance Corp and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni 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 Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Petrolimex Insurance i.e., Petrolimex Insurance and Post go up and down completely randomly.
Pair Corralation between Petrolimex Insurance and Post
Assuming the 90 days trading horizon Petrolimex Insurance Corp is expected to generate 0.5 times more return on investment than Post. However, Petrolimex Insurance Corp is 2.02 times less risky than Post. It trades about 0.2 of its potential returns per unit of risk. Post and Telecommunications is currently generating about -0.01 per unit of risk. If you would invest 2,250,000 in Petrolimex Insurance Corp on August 27, 2024 and sell it today you would earn a total of 100,000 from holding Petrolimex Insurance Corp or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Petrolimex Insurance Corp vs. Post and Telecommunications
Performance |
| Timeline |
| Petrolimex Insurance Corp |
| Post and Telecommuni |
Petrolimex Insurance and Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Insurance and Post
The main advantage of trading using opposite Petrolimex Insurance and Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Insurance position performs unexpectedly, Post 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 Post will offset losses from the drop in Post'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 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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