Correlation Between Pacific Petroleum and Mobile World

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

By analyzing existing cross correlation between Pacific Petroleum Transportation and Mobile World Investment, you can compare the effects of market volatilities on Pacific Petroleum and Mobile World 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 Pacific Petroleum with a short position of Mobile World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Petroleum and Mobile World.

Diversification Opportunities for Pacific Petroleum and Mobile World

-0.11

Correlation Coefficient

Pacific Petroleum  Mobile World

Good diversification

The 3 months correlation between Pacific and Mobile is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Petroleum Transportati and Mobile World Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile World Investment and Pacific Petroleum 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 Pacific Petroleum Transportation are associated (or correlated) with Mobile World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile World Investment has no effect on the direction of Pacific Petroleum i.e., Pacific Petroleum and Mobile World go up and down completely randomly.

Pair Corralation between Pacific Petroleum and Mobile World

Assuming the 90 days trading horizon Pacific Petroleum Transportation is expected to under-perform the Mobile World. In addition to that, Pacific Petroleum is 1.22 times more volatile than Mobile World Investment. It trades about -0.09 of its total potential returns per unit of risk. Mobile World Investment is currently generating about -0.01 per unit of volatility. If you would invest  6,140,000  in Mobile World Investment on December 27, 2024 and sell it today you would lose (100,000) from holding Mobile World Investment or give up 1.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Pacific Petroleum Transportati  vs.  Mobile World Investment

Pacific Petroleum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pacific Petroleum Transportation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Mobile World Investment

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pacific Petroleum and Mobile World

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

The idea behind Pacific Petroleum Transportation and Mobile World Investment 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.