Correlation Between PXP Energy and Balai Ni
Can any of the company-specific risk be diversified away by investing in both PXP Energy and Balai Ni 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 PXP Energy and Balai Ni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PXP Energy Corp and Balai Ni Fruitas, you can compare the effects of market volatilities on PXP Energy and Balai Ni 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 PXP Energy with a short position of Balai Ni. Check out your portfolio center. Please also check ongoing floating volatility patterns of PXP Energy and Balai Ni.
Diversification Opportunities for PXP Energy and Balai Ni
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PXP and Balai is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PXP Energy Corp and Balai Ni Fruitas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balai Ni Fruitas and PXP Energy 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 PXP Energy Corp are associated (or correlated) with Balai Ni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balai Ni Fruitas has no effect on the direction of PXP Energy i.e., PXP Energy and Balai Ni go up and down completely randomly.
Pair Corralation between PXP Energy and Balai Ni
Assuming the 90 days trading horizon PXP Energy Corp is expected to under-perform the Balai Ni. In addition to that, PXP Energy is 1.24 times more volatile than Balai Ni Fruitas. It trades about -0.03 of its total potential returns per unit of risk. Balai Ni Fruitas is currently generating about -0.02 per unit of volatility. If you would invest 56.00 in Balai Ni Fruitas on August 30, 2024 and sell it today you would lose (20.00) from holding Balai Ni Fruitas or give up 35.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.54% |
| Values | Daily Returns |
PXP Energy Corp vs. Balai Ni Fruitas
Performance |
| Timeline |
| PXP Energy Corp |
| Balai Ni Fruitas |
PXP Energy and Balai Ni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PXP Energy and Balai Ni
The main advantage of trading using opposite PXP Energy and Balai Ni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PXP Energy position performs unexpectedly, Balai Ni 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 Balai Ni will offset losses from the drop in Balai Ni's long position.| PXP Energy vs. Security Bank Corp | PXP Energy vs. Converge Information Communications | PXP Energy vs. Bank of the | PXP Energy vs. Philex Mining 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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