Correlation Between InPlay Oil and Nib Holdings
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Nib Holdings 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 Nib Holdings 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 nib holdings limited, you can compare the effects of market volatilities on InPlay Oil and Nib Holdings 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 Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Nib Holdings.
Diversification Opportunities for InPlay Oil and Nib Holdings
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InPlay and Nib is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and nib holdings limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nib holdings limited 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 Nib Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nib holdings limited has no effect on the direction of InPlay Oil i.e., InPlay Oil and Nib Holdings go up and down completely randomly.
Pair Corralation between InPlay Oil and Nib Holdings
Assuming the 90 days trading horizon InPlay Oil Corp is expected to generate 2.64 times more return on investment than Nib Holdings. However, InPlay Oil is 2.64 times more volatile than nib holdings limited. It trades about 0.14 of its potential returns per unit of risk. nib holdings limited is currently generating about -0.17 per unit of risk. If you would invest 104.00 in InPlay Oil Corp on October 25, 2024 and sell it today you would earn a total of 8.00 from holding InPlay Oil Corp or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
InPlay Oil Corp vs. nib holdings limited
Performance |
| Timeline |
| InPlay Oil Corp |
| nib holdings limited |
InPlay Oil and Nib Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Nib Holdings
The main advantage of trading using opposite InPlay Oil and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Nib Holdings 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 Nib Holdings will offset losses from the drop in Nib Holdings' long position.| InPlay Oil vs. Global Ship Lease | InPlay Oil vs. AMAG Austria Metall | InPlay Oil vs. United Rentals | InPlay Oil vs. AEON METALS LTD |
| Nib Holdings vs. PLAY2CHILL SA ZY | Nib Holdings vs. Molson Coors Beverage | Nib Holdings vs. IMPERIAL TOBACCO | Nib Holdings vs. InPlay Oil 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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