Correlation Between Freeport McMoRan and ONEOK
Can any of the company-specific risk be diversified away by investing in both Freeport McMoRan and ONEOK 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 Freeport McMoRan and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freeport McMoRan and ONEOK Inc, you can compare the effects of market volatilities on Freeport McMoRan and ONEOK 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 Freeport McMoRan with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport McMoRan and ONEOK.
Diversification Opportunities for Freeport McMoRan and ONEOK
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Freeport and ONEOK is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoRan and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and Freeport McMoRan 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 Freeport McMoRan are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Freeport McMoRan i.e., Freeport McMoRan and ONEOK go up and down completely randomly.
Pair Corralation between Freeport McMoRan and ONEOK
Assuming the 90 days trading horizon Freeport McMoRan is expected to generate 14.64 times less return on investment than ONEOK. In addition to that, Freeport McMoRan is 1.49 times more volatile than ONEOK Inc. It trades about 0.0 of its total potential returns per unit of risk. ONEOK Inc is currently generating about 0.07 per unit of volatility. If you would invest 6,254 in ONEOK Inc on October 10, 2024 and sell it today you would earn a total of 3,989 from holding ONEOK Inc or generate 63.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Freeport McMoRan vs. ONEOK Inc
Performance |
| Timeline |
| Freeport McMoRan |
| ONEOK Inc |
Freeport McMoRan and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freeport McMoRan and ONEOK
The main advantage of trading using opposite Freeport McMoRan and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoRan position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| Freeport McMoRan vs. Empire Metals Limited | Freeport McMoRan vs. Lundin Mining Corp | Freeport McMoRan vs. Vitec Software Group | Freeport McMoRan vs. European Metals Holdings |
| ONEOK vs. Roadside Real Estate | ONEOK vs. Gamma Communications PLC | ONEOK vs. Batm Advanced Communications | ONEOK vs. Martin Marietta Materials |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |