Correlation Between An Gia and Petrolimex International

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

By analyzing existing cross correlation between An Gia Real and Petrolimex International Trading, you can compare the effects of market volatilities on An Gia and Petrolimex International 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 An Gia with a short position of Petrolimex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Gia and Petrolimex International.

Diversification Opportunities for An Gia and Petrolimex International

0.57

Correlation Coefficient

An Gia  Petrolimex International

Very weak diversification

The 3 months correlation between AGG and Petrolimex is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding An Gia Real and Petrolimex International Tradi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex International and An Gia 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 An Gia Real are associated (or correlated) with Petrolimex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex International has no effect on the direction of An Gia i.e., An Gia and Petrolimex International go up and down completely randomly.

Pair Corralation between An Gia and Petrolimex International

Assuming the 90 days trading horizon An Gia Real is expected to under-perform the Petrolimex International. But the stock apears to be less risky and, when comparing its historical volatility, An Gia Real is 1.39 times less risky than Petrolimex International. The stock trades about -0.03 of its potential returns per unit of risk. The Petrolimex International Trading is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  555,000  in Petrolimex International Trading on September 13, 2024 and sell it today you would lose (26,000) from holding Petrolimex International Trading or give up 4.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

An Gia Real  vs.  Petrolimex International Tradi

An Gia Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days An Gia Real has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, An Gia is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Petrolimex International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petrolimex International Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Petrolimex International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with An Gia and Petrolimex International

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

The idea behind An Gia Real and Petrolimex International Trading 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.