Correlation Between Valero Energy and AKR Corporindo
Can any of the company-specific risk be diversified away by investing in both Valero Energy and AKR Corporindo 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 Valero Energy and AKR Corporindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valero Energy and AKR Corporindo Tbk, you can compare the effects of market volatilities on Valero Energy and AKR Corporindo 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 Valero Energy with a short position of AKR Corporindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valero Energy and AKR Corporindo.
Diversification Opportunities for Valero Energy and AKR Corporindo
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Valero and AKR is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Valero Energy and AKR Corporindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKR Corporindo Tbk and Valero 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 Valero Energy are associated (or correlated) with AKR Corporindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKR Corporindo Tbk has no effect on the direction of Valero Energy i.e., Valero Energy and AKR Corporindo go up and down completely randomly.
Pair Corralation between Valero Energy and AKR Corporindo
Considering the 90-day investment horizon Valero Energy is expected to generate 1.36 times more return on investment than AKR Corporindo. However, Valero Energy is 1.36 times more volatile than AKR Corporindo Tbk. It trades about -0.03 of its potential returns per unit of risk. AKR Corporindo Tbk is currently generating about -0.07 per unit of risk. If you would invest 15,177 in Valero Energy on September 1, 2024 and sell it today you would lose (1,269) from holding Valero Energy or give up 8.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Valero Energy vs. AKR Corporindo Tbk
Performance |
| Timeline |
| Valero Energy |
| AKR Corporindo Tbk |
Valero Energy and AKR Corporindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valero Energy and AKR Corporindo
The main advantage of trading using opposite Valero Energy and AKR Corporindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valero Energy position performs unexpectedly, AKR Corporindo 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 AKR Corporindo will offset losses from the drop in AKR Corporindo's long position.| Valero Energy vs. Phillips 66 | Valero Energy vs. HF Sinclair Corp | Valero Energy vs. PBF Energy | Valero Energy vs. CVR Energy |
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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