Correlation Between InPlay Oil and Ladder Capital
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Ladder Capital 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 Ladder Capital 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 Ladder Capital Corp, you can compare the effects of market volatilities on InPlay Oil and Ladder Capital 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 Ladder Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Ladder Capital.
Diversification Opportunities for InPlay Oil and Ladder Capital
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InPlay and Ladder is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Ladder Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladder Capital Corp 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 Ladder Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladder Capital Corp has no effect on the direction of InPlay Oil i.e., InPlay Oil and Ladder Capital go up and down completely randomly.
Pair Corralation between InPlay Oil and Ladder Capital
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Ladder Capital. In addition to that, InPlay Oil is 1.27 times more volatile than Ladder Capital Corp. It trades about -0.02 of its total potential returns per unit of risk. Ladder Capital Corp is currently generating about 0.04 per unit of volatility. If you would invest 831.00 in Ladder Capital Corp on October 13, 2024 and sell it today you would earn a total of 229.00 from holding Ladder Capital Corp or generate 27.56% 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. Ladder Capital Corp
Performance |
| Timeline |
| InPlay Oil Corp |
| Ladder Capital Corp |
InPlay Oil and Ladder Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Ladder Capital
The main advantage of trading using opposite InPlay Oil and Ladder Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Ladder Capital 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 Ladder Capital will offset losses from the drop in Ladder Capital's long position.| InPlay Oil vs. Monster Beverage Corp | InPlay Oil vs. National Beverage Corp | InPlay Oil vs. BOSTON BEER A | InPlay Oil vs. Molson Coors Beverage |
| Ladder Capital vs. InPlay Oil Corp | Ladder Capital vs. Casio Computer CoLtd | Ladder Capital vs. COLUMBIA SPORTSWEAR | Ladder Capital vs. MACOM Technology Solutions |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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