Correlation Between Petrolimex International and APG Securities

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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

PetrolimexAPGDiversified AwayPetrolimexAPGDiversified Away100%
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 Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy97.76%
ValuesDaily Returns

Petrolimex International Tradi  vs.  APG Securities Joint

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-10010
JavaScript chart by amCharts 3.21.15PIT APG
       Timeline  
Petrolimex International 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Petrolimex International Trading are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Petrolimex International displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5,0005,5006,0006,5007,0007,500
APG Securities Joint 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in APG Securities Joint are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, APG Securities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6,0006,5007,0007,5008,0008,5009,000

Petrolimex International and APG Securities Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.28-6.2-4.12-2.040.02.194.456.728.9811.24 0.0200.0250.0300.0350.0400.0450.0500.055
JavaScript chart by amCharts 3.21.15PIT APG
       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.
The idea behind Petrolimex International Trading and APG Securities Joint pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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