Correlation Between Petrolimex Information and AgriBank Securities
Can any of the company-specific risk be diversified away by investing in both Petrolimex Information and AgriBank Securities 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 Information and AgriBank Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex Information Technology and AgriBank Securities JSC, you can compare the effects of market volatilities on Petrolimex Information and AgriBank Securities 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 Information with a short position of AgriBank Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Information and AgriBank Securities.
Diversification Opportunities for Petrolimex Information and AgriBank Securities
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrolimex and AgriBank is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and AgriBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriBank Securities JSC and Petrolimex Information 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 Information Technology are associated (or correlated) with AgriBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriBank Securities JSC has no effect on the direction of Petrolimex Information i.e., Petrolimex Information and AgriBank Securities go up and down completely randomly.
Pair Corralation between Petrolimex Information and AgriBank Securities
Assuming the 90 days trading horizon Petrolimex Information Technology is expected to generate 2.29 times more return on investment than AgriBank Securities. However, Petrolimex Information is 2.29 times more volatile than AgriBank Securities JSC. It trades about 0.04 of its potential returns per unit of risk. AgriBank Securities JSC is currently generating about -0.02 per unit of risk. If you would invest 2,680,000 in Petrolimex Information Technology on September 14, 2024 and sell it today you would earn a total of 20,000 from holding Petrolimex Information Technology or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.55% |
| Values | Daily Returns |
Petrolimex Information Technol vs. AgriBank Securities JSC
Performance |
| Timeline |
| Petrolimex Information |
| AgriBank Securities JSC |
Petrolimex Information and AgriBank Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Information and AgriBank Securities
The main advantage of trading using opposite Petrolimex Information and AgriBank Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Information position performs unexpectedly, AgriBank Securities 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 AgriBank Securities will offset losses from the drop in AgriBank Securities' long position.| Petrolimex Information vs. Sao Ta Foods | Petrolimex Information vs. Vincom Retail JSC | Petrolimex Information vs. Global Electrical Technology | Petrolimex Information vs. Fecon Mining 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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