Correlation Between Pacific Petroleum and Ba Ria
Can any of the company-specific risk be diversified away by investing in both Pacific Petroleum and Ba Ria 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 Ba Ria 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 Ba Ria Thermal, you can compare the effects of market volatilities on Pacific Petroleum and Ba Ria 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 Ba Ria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Petroleum and Ba Ria.
Diversification Opportunities for Pacific Petroleum and Ba Ria
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pacific and BTP is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Petroleum Transportati and Ba Ria Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ba Ria Thermal 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 Ba Ria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ba Ria Thermal has no effect on the direction of Pacific Petroleum i.e., Pacific Petroleum and Ba Ria go up and down completely randomly.
Pair Corralation between Pacific Petroleum and Ba Ria
Assuming the 90 days trading horizon Pacific Petroleum Transportation is expected to under-perform the Ba Ria. In addition to that, Pacific Petroleum is 2.62 times more volatile than Ba Ria Thermal. It trades about -0.09 of its total potential returns per unit of risk. Ba Ria Thermal is currently generating about -0.07 per unit of volatility. If you would invest 1,200,000 in Ba Ria Thermal on November 5, 2024 and sell it today you would lose (10,000) from holding Ba Ria Thermal or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Petroleum Transportati vs. Ba Ria Thermal
Performance |
| Timeline |
| Pacific Petroleum |
| Ba Ria Thermal |
Pacific Petroleum and Ba Ria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Petroleum and Ba Ria
The main advantage of trading using opposite Pacific Petroleum and Ba Ria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Petroleum position performs unexpectedly, Ba Ria 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 Ba Ria will offset losses from the drop in Ba Ria's long position.| Pacific Petroleum vs. Hochiminh City Metal | Pacific Petroleum vs. South Basic Chemicals | Pacific Petroleum vs. Da Nang Construction | Pacific Petroleum vs. Vietnam Dairy Products |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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