Correlation Between Aba Chemicals and Offshore Oil
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By analyzing existing cross correlation between Aba Chemicals Corp and Offshore Oil Engineering, you can compare the effects of market volatilities on Aba Chemicals and Offshore Oil 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 Aba Chemicals with a short position of Offshore Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Offshore Oil.
Diversification Opportunities for Aba Chemicals and Offshore Oil
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aba and Offshore is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Offshore Oil Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offshore Oil Engineering and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Offshore Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Offshore Oil Engineering has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Offshore Oil go up and down completely randomly.
Pair Corralation between Aba Chemicals and Offshore Oil
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to generate 1.82 times more return on investment than Offshore Oil. However, Aba Chemicals is 1.82 times more volatile than Offshore Oil Engineering. It trades about 0.01 of its potential returns per unit of risk. Offshore Oil Engineering is currently generating about -0.01 per unit of risk. If you would invest 891.00 in Aba Chemicals Corp on September 12, 2024 and sell it today you would lose (77.00) from holding Aba Chemicals Corp or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Offshore Oil Engineering
Performance |
| Timeline |
| Aba Chemicals Corp |
| Offshore Oil Engineering |
Aba Chemicals and Offshore Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Offshore Oil
The main advantage of trading using opposite Aba Chemicals and Offshore Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Offshore Oil 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 Offshore Oil will offset losses from the drop in Offshore Oil's long position.| Aba Chemicals vs. Semiconductor Manufacturing Electronics | Aba Chemicals vs. GigaDevice SemiconductorBeiji | Aba Chemicals vs. Qinghaihuading Industrial Co | Aba Chemicals vs. MayAir Technology Co |
| Offshore Oil vs. Zhejiang Kingland Pipeline | Offshore Oil vs. Gansu Jiu Steel | Offshore Oil vs. Shandong Mining Machinery | Offshore Oil vs. Aba Chemicals Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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