Correlation Between Petrolimex Petrochemical and Real Estate
Can any of the company-specific risk be diversified away by investing in both Petrolimex Petrochemical and Real Estate 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 Real Estate 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 Real Estate 11, you can compare the effects of market volatilities on Petrolimex Petrochemical and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Petrochemical and Real Estate.
Diversification Opportunities for Petrolimex Petrochemical and Real Estate
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrolimex and Real is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Petrochemical JSC and Real Estate 11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate 11 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate 11 has no effect on the direction of Petrolimex Petrochemical i.e., Petrolimex Petrochemical and Real Estate go up and down completely randomly.
Pair Corralation between Petrolimex Petrochemical and Real Estate
Assuming the 90 days trading horizon Petrolimex Petrochemical JSC is expected to generate 1.06 times more return on investment than Real Estate. However, Petrolimex Petrochemical is 1.06 times more volatile than Real Estate 11. It trades about 0.01 of its potential returns per unit of risk. Real Estate 11 is currently generating about 0.0 per unit of risk. If you would invest 2,037,935 in Petrolimex Petrochemical JSC on September 3, 2024 and sell it today you would earn a total of 22,065 from holding Petrolimex Petrochemical JSC or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 82.69% |
| Values | Daily Returns |
Petrolimex Petrochemical JSC vs. Real Estate 11
Performance |
| Timeline |
| Petrolimex Petrochemical |
| Real Estate 11 |
Petrolimex Petrochemical and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Petrochemical and Real Estate
The main advantage of trading using opposite Petrolimex Petrochemical and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Petrochemical position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate'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 |
| Real Estate vs. Petrovietnam Technical Services | Real Estate vs. Telecoms Informatics JSC | Real Estate vs. Petrolimex Petrochemical JSC | Real Estate vs. Petrolimex Information Technology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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