Correlation Between 88 Energy and Andrews Sykes
Can any of the company-specific risk be diversified away by investing in both 88 Energy and Andrews Sykes 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 Andrews Sykes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 88 Energy and Andrews Sykes Group, you can compare the effects of market volatilities on 88 Energy and Andrews Sykes 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 Andrews Sykes. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and Andrews Sykes.
Diversification Opportunities for 88 Energy and Andrews Sykes
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 88E and Andrews is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and Andrews Sykes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andrews Sykes Group 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 Andrews Sykes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andrews Sykes Group has no effect on the direction of 88 Energy i.e., 88 Energy and Andrews Sykes go up and down completely randomly.
Pair Corralation between 88 Energy and Andrews Sykes
Assuming the 90 days trading horizon 88 Energy is expected to under-perform the Andrews Sykes. In addition to that, 88 Energy is 5.3 times more volatile than Andrews Sykes Group. It trades about -0.05 of its total potential returns per unit of risk. Andrews Sykes Group is currently generating about -0.04 per unit of volatility. If you would invest 56,880 in Andrews Sykes Group on September 14, 2024 and sell it today you would lose (6,730) from holding Andrews Sykes Group or give up 11.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
88 Energy vs. Andrews Sykes Group
Performance |
| Timeline |
| 88 Energy |
| Andrews Sykes Group |
88 Energy and Andrews Sykes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 88 Energy and Andrews Sykes
The main advantage of trading using opposite 88 Energy and Andrews Sykes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy position performs unexpectedly, Andrews Sykes 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 Andrews Sykes will offset losses from the drop in Andrews Sykes' long position.| 88 Energy vs. Federal Realty Investment | 88 Energy vs. Odyssean Investment Trust | 88 Energy vs. Ebro Foods | 88 Energy vs. Monks Investment Trust |
| Andrews Sykes vs. Omega Healthcare Investors | Andrews Sykes vs. Optima Health plc | Andrews Sykes vs. HCA Healthcare | Andrews Sykes vs. Universal Display 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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