Correlation Between Petrolimex International and APG Securities
Can any of the company-specific risk be diversified away by investing in both Petrolimex International and APG 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 International and APG Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex International Trading and APG Securities Joint, you can compare the effects of market volatilities on Petrolimex International and APG 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 International with a short position of APG Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex International and APG Securities.
Diversification Opportunities for Petrolimex International and APG Securities
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petrolimex and APG is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex International Tradi and APG Securities Joint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APG Securities Joint and Petrolimex International 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 International Trading are associated (or correlated) with APG Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APG Securities Joint has no effect on the direction of Petrolimex International i.e., Petrolimex International and APG Securities go up and down completely randomly.
Pair Corralation between Petrolimex International and APG Securities
Assuming the 90 days trading horizon Petrolimex International Trading is expected to generate 1.09 times more return on investment than APG Securities. However, Petrolimex International is 1.09 times more volatile than APG Securities Joint. It trades about 0.04 of its potential returns per unit of risk. APG Securities Joint is currently generating about 0.04 per unit of risk. If you would invest 450,000 in Petrolimex International Trading on November 29, 2024 and sell it today you would earn a total of 173,000 from holding Petrolimex International Trading or generate 38.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 97.76% |
Values | Daily Returns |
Petrolimex International Tradi vs. APG Securities Joint
Performance |
Timeline |
Petrolimex International |
APG Securities Joint |
Petrolimex International and APG Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petrolimex International and APG Securities
The main advantage of trading using opposite Petrolimex International and APG Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex International position performs unexpectedly, APG 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 APG Securities will offset losses from the drop in APG Securities' long position.Petrolimex International vs. Fecon Mining JSC | ||
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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