Correlation Between PETROSEA and Computer

Can any of the company-specific risk be diversified away by investing in both PETROSEA and Computer 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 PETROSEA and Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PETROSEA and Computer And Technologies, you can compare the effects of market volatilities on PETROSEA and Computer 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 PETROSEA with a short position of Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of PETROSEA and Computer.

Diversification Opportunities for PETROSEA and Computer

-0.87

Correlation Coefficient

PETROSEA  Computer

Pay attention - limited upside

The 3 months correlation between PETROSEA and Computer is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding PETROSEA and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies and PETROSEA 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 PETROSEA are associated (or correlated) with Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of PETROSEA i.e., PETROSEA and Computer go up and down completely randomly.

Pair Corralation between PETROSEA and Computer

Assuming the 90 days trading horizon PETROSEA is expected to generate 1.64 times more return on investment than Computer. However, PETROSEA is 1.64 times more volatile than Computer And Technologies. It trades about 0.11 of its potential returns per unit of risk. Computer And Technologies is currently generating about 0.05 per unit of risk. If you would invest  20.00  in PETROSEA on October 4, 2024 and sell it today you would earn a total of  144.00  from holding PETROSEA or generate 720.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

PETROSEA  vs.  Computer And Technologies

PETROSEA

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PETROSEA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PETROSEA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Computer And Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Computer And Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PETROSEA and Computer

The main advantage of trading using opposite PETROSEA and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PETROSEA position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.

The idea behind PETROSEA and Computer And Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.