Correlation Between Pacific Petroleum and Petrolimex Information
Can any of the company-specific risk be diversified away by investing in both Pacific Petroleum and Petrolimex Information 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 Petrolimex Information 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 Petrolimex Information Technology, you can compare the effects of market volatilities on Pacific Petroleum and Petrolimex Information 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 Petrolimex Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Petroleum and Petrolimex Information.
Diversification Opportunities for Pacific Petroleum and Petrolimex Information
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacific and Petrolimex is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Petroleum Transportati and Petrolimex Information Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Information 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 Petrolimex Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Information has no effect on the direction of Pacific Petroleum i.e., Pacific Petroleum and Petrolimex Information go up and down completely randomly.
Pair Corralation between Pacific Petroleum and Petrolimex Information
Assuming the 90 days trading horizon Pacific Petroleum Transportation is expected to under-perform the Petrolimex Information. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Petroleum Transportation is 1.4 times less risky than Petrolimex Information. The stock trades about -0.14 of its potential returns per unit of risk. The Petrolimex Information Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,720,000 in Petrolimex Information Technology on October 28, 2024 and sell it today you would earn a total of 170,000 from holding Petrolimex Information Technology or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.0% |
| Values | Daily Returns |
Pacific Petroleum Transportati vs. Petrolimex Information Technol
Performance |
| Timeline |
| Pacific Petroleum |
| Petrolimex Information |
Pacific Petroleum and Petrolimex Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Petroleum and Petrolimex Information
The main advantage of trading using opposite Pacific Petroleum and Petrolimex Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Petroleum position performs unexpectedly, Petrolimex Information 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 Petrolimex Information will offset losses from the drop in Petrolimex Information's long position.| Pacific Petroleum vs. Ducgiang Chemicals Detergent | Pacific Petroleum vs. Vincom Retail JSC | Pacific Petroleum vs. BaoMinh Insurance Corp | Pacific Petroleum vs. Saigon Beer Alcohol |
| Petrolimex Information vs. Ba Ria Thermal | Petrolimex Information vs. CEO Group JSC | Petrolimex Information vs. Pha Le Plastics | Petrolimex Information vs. Tay Ninh Rubber |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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