Correlation Between InPlay Oil and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on InPlay Oil and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and WIMFARM SA.
Diversification Opportunities for InPlay Oil and WIMFARM SA
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between InPlay and WIMFARM is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of InPlay Oil i.e., InPlay Oil and WIMFARM SA go up and down completely randomly.
Pair Corralation between InPlay Oil and WIMFARM SA
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the WIMFARM SA. But the stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 1.9 times less risky than WIMFARM SA. The stock trades about -0.02 of its potential returns per unit of risk. The WIMFARM SA EO is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 375.00 in WIMFARM SA EO on October 18, 2024 and sell it today you would earn a total of 14.00 from holding WIMFARM SA EO or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. WIMFARM SA EO
Performance |
| Timeline |
| InPlay Oil Corp |
| WIMFARM SA EO |
InPlay Oil and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and WIMFARM SA
The main advantage of trading using opposite InPlay Oil and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| InPlay Oil vs. USWE SPORTS AB | InPlay Oil vs. CDN IMPERIAL BANK | InPlay Oil vs. Yuexiu Transport Infrastructure | InPlay Oil vs. REVO INSURANCE SPA |
| WIMFARM SA vs. InPlay Oil Corp | WIMFARM SA vs. AUSNUTRIA DAIRY | WIMFARM SA vs. Cal Maine Foods | WIMFARM SA vs. TRAVEL LEISURE DL 01 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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