Correlation Between Petrolimex Petrochemical and Innovative Technology
Can any of the company-specific risk be diversified away by investing in both Petrolimex Petrochemical and Innovative Technology 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 Innovative Technology 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 Innovative Technology Development, you can compare the effects of market volatilities on Petrolimex Petrochemical and Innovative Technology 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 Innovative Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Petrochemical and Innovative Technology.
Diversification Opportunities for Petrolimex Petrochemical and Innovative Technology
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petrolimex and Innovative is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Petrochemical JSC and Innovative Technology Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Technology 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 Innovative Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Technology has no effect on the direction of Petrolimex Petrochemical i.e., Petrolimex Petrochemical and Innovative Technology go up and down completely randomly.
Pair Corralation between Petrolimex Petrochemical and Innovative Technology
Assuming the 90 days trading horizon Petrolimex Petrochemical JSC is expected to under-perform the Innovative Technology. But the stock apears to be less risky and, when comparing its historical volatility, Petrolimex Petrochemical JSC is 1.77 times less risky than Innovative Technology. The stock trades about -0.17 of its potential returns per unit of risk. The Innovative Technology Development is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,545,000 in Innovative Technology Development on September 3, 2024 and sell it today you would lose (240,000) from holding Innovative Technology Development or give up 15.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrolimex Petrochemical JSC vs. Innovative Technology Developm
Performance |
| Timeline |
| Petrolimex Petrochemical |
| Innovative Technology |
Petrolimex Petrochemical and Innovative Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Petrochemical and Innovative Technology
The main advantage of trading using opposite Petrolimex Petrochemical and Innovative Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Petrochemical position performs unexpectedly, Innovative Technology 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 Innovative Technology will offset losses from the drop in Innovative Technology'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 |
| Innovative Technology vs. Hai An Transport | Innovative Technology vs. PetroVietnam Transportation Corp | Innovative Technology vs. Techno Agricultural Supplying | Innovative Technology vs. POST TELECOMMU |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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