Correlation Between Pacific Petroleum and APG Securities
Can any of the company-specific risk be diversified away by investing in both Pacific Petroleum and APG Securities 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 APG Securities 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 APG Securities Joint, you can compare the effects of market volatilities on Pacific Petroleum and APG Securities 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 APG Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Petroleum and APG Securities.
Diversification Opportunities for Pacific Petroleum and APG Securities
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacific and APG is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Petroleum Transportati and APG Securities Joint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APG Securities Joint 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 APG Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APG Securities Joint has no effect on the direction of Pacific Petroleum i.e., Pacific Petroleum and APG Securities go up and down completely randomly.
Pair Corralation between Pacific Petroleum and APG Securities
Assuming the 90 days trading horizon Pacific Petroleum Transportation is expected to under-perform the APG Securities. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Petroleum Transportation is 2.25 times less risky than APG Securities. The stock trades about -0.18 of its potential returns per unit of risk. The APG Securities Joint is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 770,000 in APG Securities Joint on October 25, 2024 and sell it today you would lose (75,000) from holding APG Securities Joint or give up 9.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Petroleum Transportati vs. APG Securities Joint
Performance |
| Timeline |
| Pacific Petroleum |
| APG Securities Joint |
Pacific Petroleum and APG Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Petroleum and APG Securities
The main advantage of trading using opposite Pacific Petroleum and APG Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Petroleum position performs unexpectedly, APG Securities 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 APG Securities will offset losses from the drop in APG Securities' long position.| Pacific Petroleum vs. Ba Ria Thermal | Pacific Petroleum vs. CEO Group JSC | Pacific Petroleum vs. Pha Le Plastics | Pacific Petroleum vs. Tay Ninh Rubber |
| APG Securities vs. FIT INVEST JSC | APG Securities vs. Damsan JSC | APG Securities vs. An Phat Plastic | APG Securities vs. Binhthuan Agriculture Services |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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