Correlation Between VGS and Petrolimex International

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

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

Diversification Opportunities for VGS and Petrolimex International

0.0

Correlation Coefficient

VGS  Petrolimex International

Pay attention - limited upside

The 3 months correlation between VGS and Petrolimex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VGS and Petrolimex International Tradi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex International and VGS 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 VGS 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 VGS i.e., VGS and Petrolimex International go up and down completely randomly.

Pair Corralation between VGS and Petrolimex International

If you would invest  0.00  in VGS on September 29, 2024 and sell it today you would earn a total of  0.00  from holding VGS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.83%
Values	Daily Returns

VGS  vs.  Petrolimex International Tradi

VGS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Petrolimex International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Petrolimex International Trading are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 VGS and Petrolimex International

The main advantage of trading using opposite VGS and Petrolimex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGS 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 VGS 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.