Correlation Between Coor Service and Ithaca Energy
Can any of the company-specific risk be diversified away by investing in both Coor Service and Ithaca Energy 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 Coor Service and Ithaca Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coor Service Management and Ithaca Energy PLC, you can compare the effects of market volatilities on Coor Service and Ithaca Energy 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 Coor Service with a short position of Ithaca Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coor Service and Ithaca Energy.
Diversification Opportunities for Coor Service and Ithaca Energy
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coor and Ithaca is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service Management and Ithaca Energy PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ithaca Energy PLC and Coor Service 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 Coor Service Management are associated (or correlated) with Ithaca Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ithaca Energy PLC has no effect on the direction of Coor Service i.e., Coor Service and Ithaca Energy go up and down completely randomly.
Pair Corralation between Coor Service and Ithaca Energy
Assuming the 90 days trading horizon Coor Service is expected to generate 1.14 times less return on investment than Ithaca Energy. But when comparing it to its historical volatility, Coor Service Management is 1.66 times less risky than Ithaca Energy. It trades about 0.3 of its potential returns per unit of risk. Ithaca Energy PLC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 12,720 in Ithaca Energy PLC on November 28, 2024 and sell it today you would earn a total of 1,420 from holding Ithaca Energy PLC or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Coor Service Management vs. Ithaca Energy PLC
Performance |
| Timeline |
| Coor Service Management |
| Ithaca Energy PLC |
Coor Service and Ithaca Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coor Service and Ithaca Energy
The main advantage of trading using opposite Coor Service and Ithaca Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coor Service position performs unexpectedly, Ithaca Energy 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 Ithaca Energy will offset losses from the drop in Ithaca Energy's long position.| Coor Service vs. Home Depot | Coor Service vs. Weiss Korea Opportunity | Coor Service vs. River and Mercantile | Coor Service vs. Chrysalis Investments |
| Ithaca Energy vs. Team Internet Group | Ithaca Energy vs. Capital Metals PLC | Ithaca Energy vs. Verizon Communications | Ithaca Energy vs. Gaztransport et Technigaz |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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