Correlation Between Petrolimex Information and Materials Petroleum
Can any of the company-specific risk be diversified away by investing in both Petrolimex Information and Materials Petroleum 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 Materials Petroleum 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 Materials Petroleum JSC, you can compare the effects of market volatilities on Petrolimex Information and Materials Petroleum 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 Materials Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Information and Materials Petroleum.
Diversification Opportunities for Petrolimex Information and Materials Petroleum
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petrolimex and Materials is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and Materials Petroleum JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Petroleum 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 Materials Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Petroleum JSC has no effect on the direction of Petrolimex Information i.e., Petrolimex Information and Materials Petroleum go up and down completely randomly.
Pair Corralation between Petrolimex Information and Materials Petroleum
Assuming the 90 days trading horizon Petrolimex Information Technology is expected to generate 1.11 times more return on investment than Materials Petroleum. However, Petrolimex Information is 1.11 times more volatile than Materials Petroleum JSC. It trades about 0.03 of its potential returns per unit of risk. Materials Petroleum JSC is currently generating about 0.02 per unit of risk. If you would invest 2,547,302 in Petrolimex Information Technology on September 1, 2024 and sell it today you would earn a total of 142,698 from holding Petrolimex Information Technology or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.43% |
| Values | Daily Returns |
Petrolimex Information Technol vs. Materials Petroleum JSC
Performance |
| Timeline |
| Petrolimex Information |
| Materials Petroleum JSC |
Petrolimex Information and Materials Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Information and Materials Petroleum
The main advantage of trading using opposite Petrolimex Information and Materials Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Information position performs unexpectedly, Materials Petroleum 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 Materials Petroleum will offset losses from the drop in Materials Petroleum's long position.| Petrolimex Information vs. Song Hong Garment | Petrolimex Information vs. Alphanam ME | Petrolimex Information vs. Hochiminh City Metal | Petrolimex Information vs. Atesco Industrial Cartering |
| Materials Petroleum vs. FIT INVEST JSC | Materials Petroleum vs. Damsan JSC | Materials Petroleum vs. An Phat Plastic | Materials Petroleum 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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