Correlation Between InPlay Oil and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and ARDAGH METAL 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on InPlay Oil and ARDAGH METAL 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 ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and ARDAGH METAL.
Diversification Opportunities for InPlay Oil and ARDAGH METAL
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InPlay and ARDAGH is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL 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 ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of InPlay Oil i.e., InPlay Oil and ARDAGH METAL go up and down completely randomly.
Pair Corralation between InPlay Oil and ARDAGH METAL
Assuming the 90 days trading horizon InPlay Oil Corp is expected to generate 0.38 times more return on investment than ARDAGH METAL. However, InPlay Oil Corp is 2.65 times less risky than ARDAGH METAL. It trades about -0.49 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about -0.21 per unit of risk. If you would invest 119.00 in InPlay Oil Corp on September 24, 2024 and sell it today you would lose (16.00) from holding InPlay Oil Corp or give up 13.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| InPlay Oil Corp |
| ARDAGH METAL PACDL |
InPlay Oil and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and ARDAGH METAL
The main advantage of trading using opposite InPlay Oil and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| InPlay Oil vs. CompuGroup Medical SE | InPlay Oil vs. IMPERIAL TOBACCO | InPlay Oil vs. Compugroup Medical SE | InPlay Oil vs. Apollo Medical Holdings |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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