Correlation Between 88 Energy and Oceania Healthcare
Can any of the company-specific risk be diversified away by investing in both 88 Energy and Oceania Healthcare 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 88 Energy and Oceania Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 88 Energy and Oceania Healthcare, you can compare the effects of market volatilities on 88 Energy and Oceania Healthcare 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 88 Energy with a short position of Oceania Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and Oceania Healthcare.
Diversification Opportunities for 88 Energy and Oceania Healthcare
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 88E and Oceania is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and Oceania Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceania Healthcare and 88 Energy 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 88 Energy are associated (or correlated) with Oceania Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceania Healthcare has no effect on the direction of 88 Energy i.e., 88 Energy and Oceania Healthcare go up and down completely randomly.
Pair Corralation between 88 Energy and Oceania Healthcare
Assuming the 90 days trading horizon 88 Energy is expected to generate 9.51 times more return on investment than Oceania Healthcare. However, 88 Energy is 9.51 times more volatile than Oceania Healthcare. It trades about 0.11 of its potential returns per unit of risk. Oceania Healthcare is currently generating about 0.02 per unit of risk. If you would invest 0.60 in 88 Energy on December 4, 2024 and sell it today you would lose (0.50) from holding 88 Energy or give up 83.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
88 Energy vs. Oceania Healthcare
Performance |
| Timeline |
| 88 Energy |
| Oceania Healthcare |
88 Energy and Oceania Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 88 Energy and Oceania Healthcare
The main advantage of trading using opposite 88 Energy and Oceania Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy position performs unexpectedly, Oceania Healthcare 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 Oceania Healthcare will offset losses from the drop in Oceania Healthcare's long position.| 88 Energy vs. Sandon Capital Investments | 88 Energy vs. Galena Mining | 88 Energy vs. Microequities Asset Management | 88 Energy vs. Autosports Group |
| Oceania Healthcare vs. Hutchison Telecommunications | Oceania Healthcare vs. Collins Foods | Oceania Healthcare vs. Kkr Credit Income | Oceania Healthcare vs. Queste Communications |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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