Correlation Between InPlay Oil and KERINGUNSPADR 1/10
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10 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 KERINGUNSPADR 110 EO, you can compare the effects of market volatilities on InPlay Oil and KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and KERINGUNSPADR 1/10.
Diversification Opportunities for InPlay Oil and KERINGUNSPADR 1/10
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InPlay and KERINGUNSPADR is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and KERINGUNSPADR 110 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KERINGUNSPADR 1/10 has no effect on the direction of InPlay Oil i.e., InPlay Oil and KERINGUNSPADR 1/10 go up and down completely randomly.
Pair Corralation between InPlay Oil and KERINGUNSPADR 1/10
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the KERINGUNSPADR 1/10. But the stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 1.07 times less risky than KERINGUNSPADR 1/10. The stock trades about -0.05 of its potential returns per unit of risk. The KERINGUNSPADR 110 EO is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,259 in KERINGUNSPADR 110 EO on November 6, 2024 and sell it today you would earn a total of 281.00 from holding KERINGUNSPADR 110 EO or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. KERINGUNSPADR 110 EO
Performance |
| Timeline |
| InPlay Oil Corp |
| KERINGUNSPADR 1/10 |
InPlay Oil and KERINGUNSPADR 1/10 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and KERINGUNSPADR 1/10
The main advantage of trading using opposite InPlay Oil and KERINGUNSPADR 1/10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10 will offset losses from the drop in KERINGUNSPADR 1/10's long position.| InPlay Oil vs. CITIC Telecom International | InPlay Oil vs. TROPHY GAMES DEV | InPlay Oil vs. Boyd Gaming | InPlay Oil vs. COMBA TELECOM SYST |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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