Correlation Between Petrolimex Information and Tienlen Steel
Can any of the company-specific risk be diversified away by investing in both Petrolimex Information and Tienlen Steel 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 Tienlen Steel 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 Tienlen Steel Corp, you can compare the effects of market volatilities on Petrolimex Information and Tienlen Steel 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 Tienlen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Information and Tienlen Steel.
Diversification Opportunities for Petrolimex Information and Tienlen Steel
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrolimex and Tienlen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and Tienlen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tienlen Steel Corp 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 Tienlen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tienlen Steel Corp has no effect on the direction of Petrolimex Information i.e., Petrolimex Information and Tienlen Steel go up and down completely randomly.
Pair Corralation between Petrolimex Information and Tienlen Steel
Assuming the 90 days trading horizon Petrolimex Information Technology is expected to generate 2.41 times more return on investment than Tienlen Steel. However, Petrolimex Information is 2.41 times more volatile than Tienlen Steel Corp. It trades about 0.04 of its potential returns per unit of risk. Tienlen Steel Corp is currently generating about -0.02 per unit of risk. If you would invest 2,132,293 in Petrolimex Information Technology on September 3, 2024 and sell it today you would earn a total of 557,707 from holding Petrolimex Information Technology or generate 26.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.07% |
| Values | Daily Returns |
Petrolimex Information Technol vs. Tienlen Steel Corp
Performance |
| Timeline |
| Petrolimex Information |
| Tienlen Steel Corp |
Petrolimex Information and Tienlen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Information and Tienlen Steel
The main advantage of trading using opposite Petrolimex Information and Tienlen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Information position performs unexpectedly, Tienlen Steel 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 Tienlen Steel will offset losses from the drop in Tienlen Steel's long position.| Petrolimex Information vs. Vinhomes JSC | Petrolimex Information vs. Picomat Plastic JSC | Petrolimex Information vs. Phuoc Hoa Rubber | Petrolimex Information vs. Japan Vietnam Medical |
| Tienlen Steel vs. FIT INVEST JSC | Tienlen Steel vs. Damsan JSC | Tienlen Steel vs. An Phat Plastic | Tienlen Steel 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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