Correlation Between InPlay Oil and H World
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and H World 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 H World 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 H World Group, you can compare the effects of market volatilities on InPlay Oil and H World 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 H World. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and H World.
Diversification Opportunities for InPlay Oil and H World
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between InPlay and CL4A is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and H World Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H World Group 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 H World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H World Group has no effect on the direction of InPlay Oil i.e., InPlay Oil and H World go up and down completely randomly.
Pair Corralation between InPlay Oil and H World
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the H World. But the stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 1.77 times less risky than H World. The stock trades about -0.09 of its potential returns per unit of risk. The H World Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,084 in H World Group on September 15, 2024 and sell it today you would earn a total of 36.00 from holding H World Group or generate 1.17% 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. H World Group
Performance |
| Timeline |
| InPlay Oil Corp |
| H World Group |
InPlay Oil and H World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and H World
The main advantage of trading using opposite InPlay Oil and H World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, H World 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 H World will offset losses from the drop in H World's long position.| InPlay Oil vs. International Game Technology | InPlay Oil vs. NorAm Drilling AS | InPlay Oil vs. Games Workshop Group | InPlay Oil vs. AXWAY SOFTWARE EO |
| H World vs. Columbia Sportswear | H World vs. Aluminum of | H World vs. InPlay Oil Corp | H World vs. ARDAGH METAL PACDL 0001 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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