Correlation Between Offshore Oil and Xiamen East
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By analyzing existing cross correlation between Offshore Oil Engineering and Xiamen East Asia, you can compare the effects of market volatilities on Offshore Oil and Xiamen East 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 Offshore Oil with a short position of Xiamen East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Offshore Oil and Xiamen East.
Diversification Opportunities for Offshore Oil and Xiamen East
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Offshore and Xiamen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Offshore Oil Engineering and Xiamen East Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen East Asia and Offshore Oil 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 Offshore Oil Engineering are associated (or correlated) with Xiamen East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen East Asia has no effect on the direction of Offshore Oil i.e., Offshore Oil and Xiamen East go up and down completely randomly.
Pair Corralation between Offshore Oil and Xiamen East
Assuming the 90 days trading horizon Offshore Oil Engineering is expected to generate 0.59 times more return on investment than Xiamen East. However, Offshore Oil Engineering is 1.69 times less risky than Xiamen East. It trades about -0.13 of its potential returns per unit of risk. Xiamen East Asia is currently generating about -0.12 per unit of risk. If you would invest 555.00 in Offshore Oil Engineering on August 28, 2024 and sell it today you would lose (23.00) from holding Offshore Oil Engineering or give up 4.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Offshore Oil Engineering vs. Xiamen East Asia
Performance |
| Timeline |
| Offshore Oil Engineering |
| Xiamen East Asia |
Offshore Oil and Xiamen East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Offshore Oil and Xiamen East
The main advantage of trading using opposite Offshore Oil and Xiamen East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Offshore Oil position performs unexpectedly, Xiamen East 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 Xiamen East will offset losses from the drop in Xiamen East's long position.| Offshore Oil vs. Heren Health Co | Offshore Oil vs. RoadMain T Co | Offshore Oil vs. Meinian Onehealth Healthcare | Offshore Oil vs. Dezhan HealthCare Co |
| Xiamen East vs. Yili Chuanning Biotechnology | Xiamen East vs. Shandong Polymer Biochemicals | Xiamen East vs. Henan Shuanghui Investment | Xiamen East vs. Maccura Biotechnology Co |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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