Correlation Between Offshore Oil and Sichuan Qiaoyuan
Specify exactly 2 symbols:
By analyzing existing cross correlation between Offshore Oil Engineering and Sichuan Qiaoyuan Gas, you can compare the effects of market volatilities on Offshore Oil and Sichuan Qiaoyuan 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 Sichuan Qiaoyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Offshore Oil and Sichuan Qiaoyuan.
Diversification Opportunities for Offshore Oil and Sichuan Qiaoyuan
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Offshore and Sichuan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Offshore Oil Engineering and Sichuan Qiaoyuan Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Qiaoyuan Gas 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 Sichuan Qiaoyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Qiaoyuan Gas has no effect on the direction of Offshore Oil i.e., Offshore Oil and Sichuan Qiaoyuan go up and down completely randomly.
Pair Corralation between Offshore Oil and Sichuan Qiaoyuan
Assuming the 90 days trading horizon Offshore Oil Engineering is expected to under-perform the Sichuan Qiaoyuan. But the stock apears to be less risky and, when comparing its historical volatility, Offshore Oil Engineering is 1.01 times less risky than Sichuan Qiaoyuan. The stock trades about -0.01 of its potential returns per unit of risk. The Sichuan Qiaoyuan Gas is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,297 in Sichuan Qiaoyuan Gas on November 8, 2024 and sell it today you would earn a total of 930.00 from holding Sichuan Qiaoyuan Gas or generate 40.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Offshore Oil Engineering vs. Sichuan Qiaoyuan Gas
Performance |
| Timeline |
| Offshore Oil Engineering |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sichuan Qiaoyuan Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Offshore Oil and Sichuan Qiaoyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Offshore Oil and Sichuan Qiaoyuan
The main advantage of trading using opposite Offshore Oil and Sichuan Qiaoyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Offshore Oil position performs unexpectedly, Sichuan Qiaoyuan 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 Sichuan Qiaoyuan will offset losses from the drop in Sichuan Qiaoyuan's long position.The idea behind Offshore Oil Engineering and Sichuan Qiaoyuan Gas 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.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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |