Correlation Between Post and Materials Petroleum
Can any of the company-specific risk be diversified away by investing in both Post and Materials Petroleum 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 Post and Materials Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post and Telecommunications and Materials Petroleum JSC, you can compare the effects of market volatilities on Post and Materials Petroleum 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 Post with a short position of Materials Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and Materials Petroleum.
Diversification Opportunities for Post and Materials Petroleum
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Post and Materials is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and Materials Petroleum JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Petroleum JSC and Post 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 Post and Telecommunications are associated (or correlated) with Materials Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Petroleum JSC has no effect on the direction of Post i.e., Post and Materials Petroleum go up and down completely randomly.
Pair Corralation between Post and Materials Petroleum
Assuming the 90 days trading horizon Post and Telecommunications is expected to generate 0.9 times more return on investment than Materials Petroleum. However, Post and Telecommunications is 1.11 times less risky than Materials Petroleum. It trades about 0.0 of its potential returns per unit of risk. Materials Petroleum JSC is currently generating about -0.21 per unit of risk. If you would invest 460,000 in Post and Telecommunications on September 25, 2024 and sell it today you would lose (1,000.00) from holding Post and Telecommunications or give up 0.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 61.9% |
Values | Daily Returns |
Post and Telecommunications vs. Materials Petroleum JSC
Performance |
Timeline |
Post and Telecommuni |
Materials Petroleum JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Post and Materials Petroleum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Post and Materials Petroleum
The main advantage of trading using opposite Post and Materials Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post position performs unexpectedly, Materials Petroleum 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 Materials Petroleum will offset losses from the drop in Materials Petroleum's long position.Post vs. Ba Ria Thermal | Post vs. Hochiminh City Metal | Post vs. Industrial Urban Development | Post vs. Long An Food |
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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 Stocks Directory module to find actively traded stocks across global markets.
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