Correlation Between InPlay Oil and Focus Home
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Focus Home 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 InPlay Oil and Focus Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Focus Home Interactive, you can compare the effects of market volatilities on InPlay Oil and Focus Home 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 InPlay Oil with a short position of Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Focus Home.
Diversification Opportunities for InPlay Oil and Focus Home
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between InPlay and Focus is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive and InPlay 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 InPlay Oil Corp are associated (or correlated) with Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of InPlay Oil i.e., InPlay Oil and Focus Home go up and down completely randomly.
Pair Corralation between InPlay Oil and Focus Home
Assuming the 90 days trading horizon InPlay Oil Corp is expected to generate 1.08 times more return on investment than Focus Home. However, InPlay Oil is 1.08 times more volatile than Focus Home Interactive. It trades about 0.1 of its potential returns per unit of risk. Focus Home Interactive is currently generating about 0.01 per unit of risk. If you would invest 104.00 in InPlay Oil Corp on October 28, 2024 and sell it today you would earn a total of 6.00 from holding InPlay Oil Corp or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Focus Home Interactive
Performance |
| Timeline |
| InPlay Oil Corp |
| Focus Home Interactive |
InPlay Oil and Focus Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Focus Home
The main advantage of trading using opposite InPlay Oil and Focus Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Focus Home 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 Focus Home will offset losses from the drop in Focus Home's long position.| InPlay Oil vs. FLOW TRADERS LTD | InPlay Oil vs. Tradeweb Markets | InPlay Oil vs. Transport International Holdings | InPlay Oil vs. CarsalesCom |
| Focus Home vs. Guangdong Investment Limited | Focus Home vs. MGIC INVESTMENT | Focus Home vs. Ubisoft Entertainment SA | Focus Home vs. RCS MediaGroup SpA |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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