Correlation Between Petrolimex Insurance and PVI Holdings
Can any of the company-specific risk be diversified away by investing in both Petrolimex Insurance and PVI Holdings 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 PVI Holdings 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 PVI Holdings, you can compare the effects of market volatilities on Petrolimex Insurance and PVI Holdings 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 PVI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Insurance and PVI Holdings.
Diversification Opportunities for Petrolimex Insurance and PVI Holdings
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petrolimex and PVI is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Insurance Corp and PVI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVI Holdings 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 PVI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVI Holdings has no effect on the direction of Petrolimex Insurance i.e., Petrolimex Insurance and PVI Holdings go up and down completely randomly.
Pair Corralation between Petrolimex Insurance and PVI Holdings
Assuming the 90 days trading horizon Petrolimex Insurance Corp is expected to generate 1.89 times more return on investment than PVI Holdings. However, Petrolimex Insurance is 1.89 times more volatile than PVI Holdings. It trades about 0.19 of its potential returns per unit of risk. PVI Holdings is currently generating about -0.12 per unit of risk. If you would invest 2,250,000 in Petrolimex Insurance Corp on August 29, 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 Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Petrolimex Insurance Corp vs. PVI Holdings
Performance |
| Timeline |
| Petrolimex Insurance Corp |
| PVI Holdings |
Petrolimex Insurance and PVI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Insurance and PVI Holdings
The main advantage of trading using opposite Petrolimex Insurance and PVI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Insurance position performs unexpectedly, PVI Holdings 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 PVI Holdings will offset losses from the drop in PVI Holdings' 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 |
| PVI Holdings vs. PVI Reinsurance Corp | PVI Holdings vs. Saigon Telecommunication Technologies | PVI Holdings vs. Tienlen Steel Corp | PVI Holdings vs. VTC Telecommunications JSC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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