Correlation Between Petrus Resources and Aminex PLC
Can any of the company-specific risk be diversified away by investing in both Petrus Resources and Aminex PLC 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 Petrus Resources and Aminex PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrus Resources and Aminex PLC, you can compare the effects of market volatilities on Petrus Resources and Aminex PLC 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 Petrus Resources with a short position of Aminex PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrus Resources and Aminex PLC.
Diversification Opportunities for Petrus Resources and Aminex PLC
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Petrus and Aminex is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Petrus Resources and Aminex PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aminex PLC and Petrus Resources 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 Petrus Resources are associated (or correlated) with Aminex PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aminex PLC has no effect on the direction of Petrus Resources i.e., Petrus Resources and Aminex PLC go up and down completely randomly.
Pair Corralation between Petrus Resources and Aminex PLC
Assuming the 90 days horizon Petrus Resources is expected to under-perform the Aminex PLC. But the otc stock apears to be less risky and, when comparing its historical volatility, Petrus Resources is 2.1 times less risky than Aminex PLC. The otc stock trades about 0.0 of its potential returns per unit of risk. The Aminex PLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Aminex PLC on August 25, 2024 and sell it today you would earn a total of 2.00 from holding Aminex PLC or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.57% |
| Values | Daily Returns |
Petrus Resources vs. Aminex PLC
Performance |
| Timeline |
| Petrus Resources |
| Aminex PLC |
Petrus Resources and Aminex PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrus Resources and Aminex PLC
The main advantage of trading using opposite Petrus Resources and Aminex PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrus Resources position performs unexpectedly, Aminex PLC 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 Aminex PLC will offset losses from the drop in Aminex PLC's long position.| Petrus Resources vs. Petroleo Brasileiro Petrobras | Petrus Resources vs. Equinor ASA ADR | Petrus Resources vs. Eni SpA ADR | Petrus Resources vs. YPF Sociedad Anonima |
| Aminex PLC vs. Petrus Resources | Aminex PLC vs. Valeura Energy | Aminex PLC vs. Epsilon Energy | Aminex PLC vs. Questerre Energy |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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