Correlation Between P10 and Petrofac
Can any of the company-specific risk be diversified away by investing in both P10 and Petrofac 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 P10 and Petrofac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between P10 Inc and Petrofac Ltd ADR, you can compare the effects of market volatilities on P10 and Petrofac 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 P10 with a short position of Petrofac. Check out your portfolio center. Please also check ongoing floating volatility patterns of P10 and Petrofac.
Diversification Opportunities for P10 and Petrofac
Pay attention - limited upside
The 3 months correlation between P10 and Petrofac is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding P10 Inc and Petrofac Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrofac ADR and P10 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 P10 Inc are associated (or correlated) with Petrofac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrofac ADR has no effect on the direction of P10 i.e., P10 and Petrofac go up and down completely randomly.
Pair Corralation between P10 and Petrofac
Allowing for the 90-day total investment horizon P10 Inc is expected to generate 0.3 times more return on investment than Petrofac. However, P10 Inc is 3.38 times less risky than Petrofac. It trades about 0.48 of its potential returns per unit of risk. Petrofac Ltd ADR is currently generating about -0.06 per unit of risk. If you would invest 1,120 in P10 Inc on August 27, 2024 and sell it today you would earn a total of 279.00 from holding P10 Inc or generate 24.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
P10 Inc vs. Petrofac Ltd ADR
Performance |
| Timeline |
| P10 Inc |
| Petrofac ADR |
P10 and Petrofac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with P10 and Petrofac
The main advantage of trading using opposite P10 and Petrofac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if P10 position performs unexpectedly, Petrofac 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 Petrofac will offset losses from the drop in Petrofac's long position.| P10 vs. Federated Premier Municipal | P10 vs. Blackrock Muniyield | P10 vs. Diamond Hill Investment | P10 vs. NXG NextGen Infrastructure |
| Petrofac vs. Expro Group Holdings | Petrofac vs. ChampionX | Petrofac vs. Ranger Energy Services | Petrofac vs. Cactus Inc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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