Correlation Between Petrolimex Information and Global Electrical
Can any of the company-specific risk be diversified away by investing in both Petrolimex Information and Global Electrical 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 Global Electrical 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 Global Electrical Technology, you can compare the effects of market volatilities on Petrolimex Information and Global Electrical 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 Global Electrical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Information and Global Electrical.
Diversification Opportunities for Petrolimex Information and Global Electrical
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Petrolimex and Global is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and Global Electrical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Electrical 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 Global Electrical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Electrical has no effect on the direction of Petrolimex Information i.e., Petrolimex Information and Global Electrical go up and down completely randomly.
Pair Corralation between Petrolimex Information and Global Electrical
Assuming the 90 days trading horizon Petrolimex Information is expected to generate 17.99 times less return on investment than Global Electrical. But when comparing it to its historical volatility, Petrolimex Information Technology is 11.66 times less risky than Global Electrical. It trades about 0.58 of its potential returns per unit of risk. Global Electrical Technology is currently generating about 0.9 of returns per unit of risk over similar time horizon. If you would invest 2,600,000 in Global Electrical Technology on November 28, 2024 and sell it today you would earn a total of 1,100,000 from holding Global Electrical Technology or generate 42.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 66.67% |
| Values | Daily Returns |
Petrolimex Information Technol vs. Global Electrical Technology
Performance |
| Timeline |
| Petrolimex Information |
| Global Electrical |
Petrolimex Information and Global Electrical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Information and Global Electrical
The main advantage of trading using opposite Petrolimex Information and Global Electrical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Information position performs unexpectedly, Global Electrical 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 Global Electrical will offset losses from the drop in Global Electrical's long position.| Petrolimex Information vs. Materials Petroleum JSC | Petrolimex Information vs. Pha Le Plastics | Petrolimex Information vs. Long An Food | Petrolimex Information vs. Vnsteel Vicasa JSC |
| Global Electrical vs. Vietnam Petroleum Transport | Global Electrical vs. PostTelecommunication Equipment | Global Electrical vs. Hochiminh City Metal | Global Electrical vs. Elcom Technology Communications |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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