Correlation Between InPlay Oil and FOX P
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and FOX P 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 FOX P 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 FOX P B, you can compare the effects of market volatilities on InPlay Oil and FOX P 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 FOX P. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and FOX P.
Diversification Opportunities for InPlay Oil and FOX P
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InPlay and FOX is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and FOX P B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOX P B 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 FOX P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOX P B has no effect on the direction of InPlay Oil i.e., InPlay Oil and FOX P go up and down completely randomly.
Pair Corralation between InPlay Oil and FOX P
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the FOX P. In addition to that, InPlay Oil is 1.19 times more volatile than FOX P B. It trades about -0.04 of its total potential returns per unit of risk. FOX P B is currently generating about 0.09 per unit of volatility. If you would invest 2,761 in FOX P B on September 12, 2024 and sell it today you would earn a total of 1,419 from holding FOX P B or generate 51.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. FOX P B
Performance |
| Timeline |
| InPlay Oil Corp |
| FOX P B |
InPlay Oil and FOX P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and FOX P
The main advantage of trading using opposite InPlay Oil and FOX P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, FOX P 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 FOX P will offset losses from the drop in FOX P's long position.The idea behind InPlay Oil Corp and FOX P B pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FOX P vs. Vivendi SE | FOX P vs. News Corporation | FOX P vs. Prosiebensat 1 Media | FOX P vs. Superior Plus 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 CEOs Directory module to screen CEOs from public companies around the world.
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