Correlation Between Offshore Oil and Shandong Homey
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By analyzing existing cross correlation between Offshore Oil Engineering and Shandong Homey Aquatic, you can compare the effects of market volatilities on Offshore Oil and Shandong Homey 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 Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Offshore Oil and Shandong Homey.
Diversification Opportunities for Offshore Oil and Shandong Homey
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Offshore and Shandong is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Offshore Oil Engineering and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Offshore Oil i.e., Offshore Oil and Shandong Homey go up and down completely randomly.
Pair Corralation between Offshore Oil and Shandong Homey
Assuming the 90 days trading horizon Offshore Oil Engineering is expected to under-perform the Shandong Homey. But the stock apears to be less risky and, when comparing its historical volatility, Offshore Oil Engineering is 1.32 times less risky than Shandong Homey. The stock trades about -0.01 of its potential returns per unit of risk. The Shandong Homey Aquatic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 237.00 in Shandong Homey Aquatic on August 25, 2024 and sell it today you would lose (12.00) from holding Shandong Homey Aquatic or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Offshore Oil Engineering vs. Shandong Homey Aquatic
Performance |
| Timeline |
| Offshore Oil Engineering |
| Shandong Homey Aquatic |
Offshore Oil and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Offshore Oil and Shandong Homey
The main advantage of trading using opposite Offshore Oil and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Offshore Oil position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey's long position.| Offshore Oil vs. Zhejiang Kingland Pipeline | Offshore Oil vs. Xiangyang Automobile Bearing | Offshore Oil vs. COL Digital Publishing | Offshore Oil vs. Suzhou Novoprotein Scientific |
| Shandong Homey vs. China Petroleum Chemical | Shandong Homey vs. PetroChina Co Ltd | Shandong Homey vs. China State Construction | Shandong Homey vs. China Railway Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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