Correlation Between IRPC Public and Refinaria

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

By analyzing existing cross correlation between IRPC Public and Refinaria de Petrleos, you can compare the effects of market volatilities on IRPC Public and Refinaria 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 IRPC Public with a short position of Refinaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRPC Public and Refinaria.

Diversification Opportunities for IRPC Public and Refinaria

-0.55

Correlation Coefficient

IRPC Public  Refinaria

Excellent diversification

The 3 months correlation between IRPC and Refinaria is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding IRPC Public and Refinaria de Petrleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refinaria de Petrleos and IRPC Public 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 IRPC Public are associated (or correlated) with Refinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refinaria de Petrleos has no effect on the direction of IRPC Public i.e., IRPC Public and Refinaria go up and down completely randomly.

Pair Corralation between IRPC Public and Refinaria

Assuming the 90 days trading horizon IRPC Public is expected to generate 2.05 times more return on investment than Refinaria. However, IRPC Public is 2.05 times more volatile than Refinaria de Petrleos. It trades about 0.07 of its potential returns per unit of risk. Refinaria de Petrleos is currently generating about 0.02 per unit of risk. If you would invest  1.65  in IRPC Public on April 24, 2025 and sell it today you would earn a total of  0.20  from holding IRPC Public or generate 12.12% return on investment over 90 days.

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

IRPC Public  vs.  Refinaria de Petrleos

IRPC Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IRPC Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, IRPC Public reported solid returns over the last few months and may actually be approaching a breakup point.

Refinaria de Petrleos

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Refinaria de Petrleos are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Refinaria is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IRPC Public and Refinaria

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

The idea behind IRPC Public and Refinaria de Petrleos 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.