Correlation Between Petrofac and Us Energy
Can any of the company-specific risk be diversified away by investing in both Petrofac and Us Energy 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 Petrofac and Us Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrofac Ltd ADR and Us Energy Initiative, you can compare the effects of market volatilities on Petrofac and Us Energy 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 Petrofac with a short position of Us Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrofac and Us Energy.
Diversification Opportunities for Petrofac and Us Energy
Pay attention - limited upside
The 3 months correlation between Petrofac and USEI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petrofac Ltd ADR and Us Energy Initiative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Energy Initiative and Petrofac 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 Petrofac Ltd ADR are associated (or correlated) with Us Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Energy Initiative has no effect on the direction of Petrofac i.e., Petrofac and Us Energy go up and down completely randomly.
Pair Corralation between Petrofac and Us Energy
If you would invest 16.00 in Petrofac Ltd ADR on September 3, 2024 and sell it today you would lose (10.00) from holding Petrofac Ltd ADR or give up 62.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Petrofac Ltd ADR vs. Us Energy Initiative
Performance |
| Timeline |
| Petrofac ADR |
| Us Energy Initiative |
Petrofac and Us Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrofac and Us Energy
The main advantage of trading using opposite Petrofac and Us Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrofac position performs unexpectedly, Us Energy 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 Us Energy will offset losses from the drop in Us Energy's long position.| Petrofac vs. Worley Parsons | Petrofac vs. Saipem SpA | Petrofac vs. SMG Industries | Petrofac vs. Bri Chem Corp |
| Us Energy vs. TOMI Environmental Solutions | Us Energy vs. SCOR PK | Us Energy vs. HUMANA INC | Us Energy vs. Aquagold International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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