Correlation Between PETROLEOS and Chimerix

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

By analyzing existing cross correlation between PETROLEOS MEXICANOS 6375 and Chimerix, you can compare the effects of market volatilities on PETROLEOS and Chimerix 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 PETROLEOS with a short position of Chimerix. Check out your portfolio center. Please also check ongoing floating volatility patterns of PETROLEOS and Chimerix.

Diversification Opportunities for PETROLEOS and Chimerix

-0.05

Correlation Coefficient

PETROLEOS  Chimerix

Good diversification

The 3 months correlation between PETROLEOS and Chimerix is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding PETROLEOS MEXICANOS 6375 and Chimerix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimerix and PETROLEOS 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 PETROLEOS MEXICANOS 6375 are associated (or correlated) with Chimerix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimerix has no effect on the direction of PETROLEOS i.e., PETROLEOS and Chimerix go up and down completely randomly.

Pair Corralation between PETROLEOS and Chimerix

Assuming the 90 days trading horizon PETROLEOS MEXICANOS 6375 is expected to under-perform the Chimerix. But the bond apears to be less risky and, when comparing its historical volatility, PETROLEOS MEXICANOS 6375 is 1.23 times less risky than Chimerix. The bond trades about -0.06 of its potential returns per unit of risk. The Chimerix is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  87.00  in Chimerix on August 31, 2024 and sell it today you would earn a total of  4.00  from holding Chimerix or generate 4.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

PETROLEOS MEXICANOS 6375  vs.  Chimerix

PETROLEOS MEXICANOS 6375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PETROLEOS MEXICANOS 6375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PETROLEOS MEXICANOS 6375 investors.

Chimerix

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Chimerix may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with PETROLEOS and Chimerix

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

The idea behind PETROLEOS MEXICANOS 6375 and Chimerix 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.