Correlation Between InPlay Oil and MOBILE FACTORY
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and MOBILE FACTORY 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 MOBILE FACTORY 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 MOBILE FACTORY INC, you can compare the effects of market volatilities on InPlay Oil and MOBILE FACTORY 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 MOBILE FACTORY. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and MOBILE FACTORY.
Diversification Opportunities for InPlay Oil and MOBILE FACTORY
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InPlay and MOBILE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and MOBILE FACTORY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOBILE FACTORY INC 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 MOBILE FACTORY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOBILE FACTORY INC has no effect on the direction of InPlay Oil i.e., InPlay Oil and MOBILE FACTORY go up and down completely randomly.
Pair Corralation between InPlay Oil and MOBILE FACTORY
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the MOBILE FACTORY. In addition to that, InPlay Oil is 1.19 times more volatile than MOBILE FACTORY INC. It trades about -0.06 of its total potential returns per unit of risk. MOBILE FACTORY INC is currently generating about 0.05 per unit of volatility. If you would invest 540.00 in MOBILE FACTORY INC on October 30, 2024 and sell it today you would earn a total of 25.00 from holding MOBILE FACTORY INC or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. MOBILE FACTORY INC
Performance |
| Timeline |
| InPlay Oil Corp |
| MOBILE FACTORY INC |
InPlay Oil and MOBILE FACTORY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and MOBILE FACTORY
The main advantage of trading using opposite InPlay Oil and MOBILE FACTORY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, MOBILE FACTORY 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 MOBILE FACTORY will offset losses from the drop in MOBILE FACTORY's long position.| InPlay Oil vs. Linedata Services SA | InPlay Oil vs. Addus HomeCare | InPlay Oil vs. TERADATA | InPlay Oil vs. The Home Depot |
| MOBILE FACTORY vs. Entravision Communications | MOBILE FACTORY vs. CITIC Telecom International | MOBILE FACTORY vs. CONTAGIOUS GAMING INC | MOBILE FACTORY vs. Highlight Communications AG |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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