Correlation Between Star Petroleum and RPCG Public
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and RPCG Public 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 Star Petroleum and RPCG Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Petroleum Refining and RPCG Public, you can compare the effects of market volatilities on Star Petroleum and RPCG Public 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 Star Petroleum with a short position of RPCG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and RPCG Public.
Diversification Opportunities for Star Petroleum and RPCG Public
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Star and RPCG is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and RPCG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPCG Public and Star 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 Star Petroleum Refining are associated (or correlated) with RPCG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPCG Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and RPCG Public go up and down completely randomly.
Pair Corralation between Star Petroleum and RPCG Public
Assuming the 90 days trading horizon Star Petroleum Refining is expected to generate 1.1 times more return on investment than RPCG Public. However, Star Petroleum is 1.1 times more volatile than RPCG Public. It trades about 0.08 of its potential returns per unit of risk. RPCG Public is currently generating about -0.21 per unit of risk. If you would invest 655.00 in Star Petroleum Refining on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Star Petroleum Refining or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Petroleum Refining vs. RPCG Public
Performance |
| Timeline |
| Star Petroleum Refining |
| RPCG Public |
Star Petroleum and RPCG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and RPCG Public
The main advantage of trading using opposite Star Petroleum and RPCG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, RPCG Public 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 RPCG Public will offset losses from the drop in RPCG Public's long position.| Star Petroleum vs. Thai Oil Public | Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration and |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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