Correlation Between Us Energy and Petrofac
Can any of the company-specific risk be diversified away by investing in both Us Energy 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 Us Energy and Petrofac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Energy Initiative and Petrofac Ltd ADR, you can compare the effects of market volatilities on Us Energy 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 Us Energy with a short position of Petrofac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Energy and Petrofac.
Diversification Opportunities for Us Energy and Petrofac
Pay attention - limited upside
The 3 months correlation between USEI and Petrofac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Us Energy Initiative and Petrofac Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrofac ADR and Us 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 Us Energy Initiative 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 Us Energy i.e., Us Energy and Petrofac go up and down completely randomly.
Pair Corralation between Us Energy and Petrofac
If you would invest 16.00 in Petrofac Ltd ADR on September 3, 2024 and sell it today you would lose (10.00) from holding Petrofac Ltd ADR or give up 62.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Us Energy Initiative vs. Petrofac Ltd ADR
Performance |
| Timeline |
| Us Energy Initiative |
| Petrofac ADR |
Us Energy and Petrofac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Energy and Petrofac
The main advantage of trading using opposite Us Energy and Petrofac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Energy 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.| Us Energy vs. TOMI Environmental Solutions | Us Energy vs. SCOR PK | Us Energy vs. HUMANA INC | Us Energy vs. Aquagold International |
| Petrofac vs. Worley Parsons | Petrofac vs. Saipem SpA | Petrofac vs. SMG Industries | Petrofac vs. Bri Chem 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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