Correlation Between Petrolimex Petrochemical and Hai An
Can any of the company-specific risk be diversified away by investing in both Petrolimex Petrochemical and Hai An 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 Hai An 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 Hai An Transport, you can compare the effects of market volatilities on Petrolimex Petrochemical and Hai An 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 Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Petrochemical and Hai An.
Diversification Opportunities for Petrolimex Petrochemical and Hai An
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petrolimex and Hai is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Petrochemical JSC and Hai An Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hai An Transport 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 Hai An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hai An Transport has no effect on the direction of Petrolimex Petrochemical i.e., Petrolimex Petrochemical and Hai An go up and down completely randomly.
Pair Corralation between Petrolimex Petrochemical and Hai An
Assuming the 90 days trading horizon Petrolimex Petrochemical JSC is expected to under-perform the Hai An. But the stock apears to be less risky and, when comparing its historical volatility, Petrolimex Petrochemical JSC is 1.07 times less risky than Hai An. The stock trades about -0.16 of its potential returns per unit of risk. The Hai An Transport is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,320,000 in Hai An Transport on August 28, 2024 and sell it today you would earn a total of 385,000 from holding Hai An Transport or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petrolimex Petrochemical JSC vs. Hai An Transport
Performance |
| Timeline |
| Petrolimex Petrochemical |
| Hai An Transport |
Petrolimex Petrochemical and Hai An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Petrochemical and Hai An
The main advantage of trading using opposite Petrolimex Petrochemical and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Petrochemical position performs unexpectedly, Hai An 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 Hai An will offset losses from the drop in Hai An's long position.| Petrolimex Petrochemical vs. FIT INVEST JSC | Petrolimex Petrochemical vs. Damsan JSC | Petrolimex Petrochemical vs. An Phat Plastic | Petrolimex Petrochemical vs. APG Securities Joint |
| Hai An vs. FIT INVEST JSC | Hai An vs. Damsan JSC | Hai An vs. An Phat Plastic | Hai An vs. APG Securities Joint |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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