Correlation Between Petrolimex Information and POT

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

By analyzing existing cross correlation between Petrolimex Information Technology and PostTelecommunication Equipment, you can compare the effects of market volatilities on Petrolimex Information and POT 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 Petrolimex Information with a short position of POT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrolimex Information and POT.

Diversification Opportunities for Petrolimex Information and POT

0.44

Correlation Coefficient

Petrolimex Information  POT

Very weak diversification

The 3 months correlation between Petrolimex and POT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Petrolimex Information Technol and PostTelecommunication Equipmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostTelecommunication and Petrolimex Information 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 Petrolimex Information Technology are associated (or correlated) with POT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostTelecommunication has no effect on the direction of Petrolimex Information i.e., Petrolimex Information and POT go up and down completely randomly.

Pair Corralation between Petrolimex Information and POT

If you would invest  2,760,000  in Petrolimex Information Technology on October 20, 2024 and sell it today you would earn a total of  120,000  from holding Petrolimex Information Technology or generate 4.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	3.03%
Values	Daily Returns

Petrolimex Information Technol  vs.  PostTelecommunication Equipmen

Petrolimex Information

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Petrolimex Information Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Petrolimex Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PostTelecommunication

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Petrolimex Information and POT

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

The idea behind Petrolimex Information Technology and PostTelecommunication Equipment 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.