Correlation Between Petrolimex Information and Innovative Technology
Can any of the company-specific risk be diversified away by investing in both Petrolimex Information and Innovative Technology 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 Innovative Technology 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 Innovative Technology Development, you can compare the effects of market volatilities on Petrolimex Information and Innovative Technology 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 Innovative Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Information and Innovative Technology.
Diversification Opportunities for Petrolimex Information and Innovative Technology
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petrolimex and Innovative is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and Innovative Technology Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Technology 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 Innovative Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Technology has no effect on the direction of Petrolimex Information i.e., Petrolimex Information and Innovative Technology go up and down completely randomly.
Pair Corralation between Petrolimex Information and Innovative Technology
Assuming the 90 days trading horizon Petrolimex Information is expected to generate 2.08 times less return on investment than Innovative Technology. But when comparing it to its historical volatility, Petrolimex Information Technology is 4.36 times less risky than Innovative Technology. It trades about 0.58 of its potential returns per unit of risk. Innovative Technology Development is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,365,000 in Innovative Technology Development on November 28, 2024 and sell it today you would earn a total of 125,000 from holding Innovative Technology Development or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.59% |
| Values | Daily Returns |
Petrolimex Information Technol vs. Innovative Technology Developm
Performance |
| Timeline |
| Petrolimex Information |
| Innovative Technology |
Petrolimex Information and Innovative Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Information and Innovative Technology
The main advantage of trading using opposite Petrolimex Information and Innovative Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Information position performs unexpectedly, Innovative Technology 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 Innovative Technology will offset losses from the drop in Innovative Technology'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 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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