Correlation Between Pacific Petroleum and Song Hong
Can any of the company-specific risk be diversified away by investing in both Pacific Petroleum and Song Hong 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 Song Hong 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 Song Hong Aluminum, you can compare the effects of market volatilities on Pacific Petroleum and Song Hong 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 Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Petroleum and Song Hong.
Diversification Opportunities for Pacific Petroleum and Song Hong
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacific and Song is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Petroleum Transportati and Song Hong Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Aluminum 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 Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Aluminum has no effect on the direction of Pacific Petroleum i.e., Pacific Petroleum and Song Hong go up and down completely randomly.
Pair Corralation between Pacific Petroleum and Song Hong
Assuming the 90 days trading horizon Pacific Petroleum Transportation is expected to generate 0.87 times more return on investment than Song Hong. However, Pacific Petroleum Transportation is 1.15 times less risky than Song Hong. It trades about 0.06 of its potential returns per unit of risk. Song Hong Aluminum is currently generating about 0.01 per unit of risk. If you would invest 1,620,000 in Pacific Petroleum Transportation on October 30, 2024 and sell it today you would earn a total of 60,000 from holding Pacific Petroleum Transportation or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Petroleum Transportati vs. Song Hong Aluminum
Performance |
| Timeline |
| Pacific Petroleum |
| Song Hong Aluminum |
Pacific Petroleum and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Petroleum and Song Hong
The main advantage of trading using opposite Pacific Petroleum and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Petroleum position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| Pacific Petroleum vs. Long Giang Investment | Pacific Petroleum vs. PV2 Investment JSC | Pacific Petroleum vs. Hanoi Beer Alcohol | Pacific Petroleum vs. Elcom Technology Communications |
| Song Hong vs. Long Giang Investment | Song Hong vs. Din Capital Investment | Song Hong vs. Saigon Viendong Technology | Song Hong vs. Tienlen Steel Corp |
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.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |