Correlation Between Pacific Petroleum and Asia Commercial
Can any of the company-specific risk be diversified away by investing in both Pacific Petroleum and Asia Commercial 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 Pacific Petroleum and Asia Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Petroleum Transportation and Asia Commercial Bank, you can compare the effects of market volatilities on Pacific Petroleum and Asia Commercial 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 Pacific Petroleum with a short position of Asia Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Petroleum and Asia Commercial.
Diversification Opportunities for Pacific Petroleum and Asia Commercial
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacific and Asia is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Petroleum Transportati and Asia Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Commercial Bank and Pacific Petroleum 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 Pacific Petroleum Transportation are associated (or correlated) with Asia Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Commercial Bank has no effect on the direction of Pacific Petroleum i.e., Pacific Petroleum and Asia Commercial go up and down completely randomly.
Pair Corralation between Pacific Petroleum and Asia Commercial
Assuming the 90 days trading horizon Pacific Petroleum Transportation is expected to generate 1.37 times more return on investment than Asia Commercial. However, Pacific Petroleum is 1.37 times more volatile than Asia Commercial Bank. It trades about 0.04 of its potential returns per unit of risk. Asia Commercial Bank is currently generating about -0.05 per unit of risk. If you would invest 1,575,000 in Pacific Petroleum Transportation on August 28, 2024 and sell it today you would earn a total of 15,000 from holding Pacific Petroleum Transportation or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Petroleum Transportati vs. Asia Commercial Bank
Performance |
| Timeline |
| Pacific Petroleum |
| Asia Commercial Bank |
Pacific Petroleum and Asia Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Petroleum and Asia Commercial
The main advantage of trading using opposite Pacific Petroleum and Asia Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Petroleum position performs unexpectedly, Asia Commercial 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 Asia Commercial will offset losses from the drop in Asia Commercial's long position.| Pacific Petroleum vs. Idico JSC | Pacific Petroleum vs. Hochiminh City Metal | Pacific Petroleum vs. Atesco Industrial Cartering | Pacific Petroleum vs. Danang Education Investment |
| Asia Commercial vs. FIT INVEST JSC | Asia Commercial vs. Damsan JSC | Asia Commercial vs. An Phat Plastic | Asia Commercial 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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