Correlation Between Petrolimex Petrochemical and Ba Ria
Can any of the company-specific risk be diversified away by investing in both Petrolimex Petrochemical and Ba Ria 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 Petrochemical and Ba Ria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrolimex Petrochemical JSC and Ba Ria Thermal, you can compare the effects of market volatilities on Petrolimex Petrochemical and Ba Ria 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 Petrochemical with a short position of Ba Ria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Petrochemical and Ba Ria.
Diversification Opportunities for Petrolimex Petrochemical and Ba Ria
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Petrolimex and BTP is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Petrochemical JSC and Ba Ria Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ba Ria Thermal and Petrolimex Petrochemical 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 Petrochemical JSC are associated (or correlated) with Ba Ria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ba Ria Thermal has no effect on the direction of Petrolimex Petrochemical i.e., Petrolimex Petrochemical and Ba Ria go up and down completely randomly.
Pair Corralation between Petrolimex Petrochemical and Ba Ria
Assuming the 90 days trading horizon Petrolimex Petrochemical JSC is expected to under-perform the Ba Ria. In addition to that, Petrolimex Petrochemical is 1.81 times more volatile than Ba Ria Thermal. It trades about -0.25 of its total potential returns per unit of risk. Ba Ria Thermal is currently generating about -0.23 per unit of volatility. If you would invest 1,270,667 in Ba Ria Thermal on September 2, 2024 and sell it today you would lose (145,667) from holding Ba Ria Thermal or give up 11.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Petrolimex Petrochemical JSC vs. Ba Ria Thermal
Performance |
| Timeline |
| Petrolimex Petrochemical |
| Ba Ria Thermal |
Petrolimex Petrochemical and Ba Ria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Petrochemical and Ba Ria
The main advantage of trading using opposite Petrolimex Petrochemical and Ba Ria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Petrochemical position performs unexpectedly, Ba Ria 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 Ba Ria will offset losses from the drop in Ba Ria's long position.| Petrolimex Petrochemical vs. FIT INVEST JSC | Petrolimex Petrochemical vs. Damsan JSC | Petrolimex Petrochemical vs. An Phat Plastic | Petrolimex Petrochemical 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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