Correlation Between Petrolimex Petrochemical and 577 Investment
Can any of the company-specific risk be diversified away by investing in both Petrolimex Petrochemical and 577 Investment 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 577 Investment 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 577 Investment Corp, you can compare the effects of market volatilities on Petrolimex Petrochemical and 577 Investment 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 577 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Petrochemical and 577 Investment.
Diversification Opportunities for Petrolimex Petrochemical and 577 Investment
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petrolimex and 577 is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Petrochemical JSC and 577 Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 577 Investment Corp 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 577 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 577 Investment Corp has no effect on the direction of Petrolimex Petrochemical i.e., Petrolimex Petrochemical and 577 Investment go up and down completely randomly.
Pair Corralation between Petrolimex Petrochemical and 577 Investment
Assuming the 90 days trading horizon Petrolimex Petrochemical JSC is expected to under-perform the 577 Investment. In addition to that, Petrolimex Petrochemical is 1.2 times more volatile than 577 Investment Corp. It trades about -0.14 of its total potential returns per unit of risk. 577 Investment Corp is currently generating about 0.08 per unit of volatility. If you would invest 2,370,000 in 577 Investment Corp on September 1, 2024 and sell it today you would earn a total of 65,000 from holding 577 Investment Corp or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrolimex Petrochemical JSC vs. 577 Investment Corp
Performance |
| Timeline |
| Petrolimex Petrochemical |
| 577 Investment Corp |
Petrolimex Petrochemical and 577 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrolimex Petrochemical and 577 Investment
The main advantage of trading using opposite Petrolimex Petrochemical and 577 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrolimex Petrochemical position performs unexpectedly, 577 Investment 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 577 Investment will offset losses from the drop in 577 Investment'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 |
| 577 Investment vs. FIT INVEST JSC | 577 Investment vs. Damsan JSC | 577 Investment vs. An Phat Plastic | 577 Investment 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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