Correlation Between MYFAIR GOLD and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both MYFAIR GOLD and InPlay Oil 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 MYFAIR GOLD and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYFAIR GOLD P and InPlay Oil Corp, you can compare the effects of market volatilities on MYFAIR GOLD and InPlay Oil 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 MYFAIR GOLD with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYFAIR GOLD and InPlay Oil.
Diversification Opportunities for MYFAIR GOLD and InPlay Oil
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MYFAIR and InPlay is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding MYFAIR GOLD P and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and MYFAIR GOLD 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 MYFAIR GOLD P are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of MYFAIR GOLD i.e., MYFAIR GOLD and InPlay Oil go up and down completely randomly.
Pair Corralation between MYFAIR GOLD and InPlay Oil
Assuming the 90 days horizon MYFAIR GOLD P is expected to generate 1.41 times more return on investment than InPlay Oil. However, MYFAIR GOLD is 1.41 times more volatile than InPlay Oil Corp. It trades about 0.02 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.02 per unit of risk. If you would invest 107.00 in MYFAIR GOLD P on October 13, 2024 and sell it today you would earn a total of 7.00 from holding MYFAIR GOLD P or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
MYFAIR GOLD P vs. InPlay Oil Corp
Performance |
| Timeline |
| MYFAIR GOLD P |
| InPlay Oil Corp |
MYFAIR GOLD and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYFAIR GOLD and InPlay Oil
The main advantage of trading using opposite MYFAIR GOLD and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYFAIR GOLD position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| MYFAIR GOLD vs. Dalata Hotel Group | MYFAIR GOLD vs. VARIOUS EATERIES LS | MYFAIR GOLD vs. Summit Materials | MYFAIR GOLD vs. COVIVIO HOTELS INH |
| InPlay Oil vs. Monster Beverage Corp | InPlay Oil vs. National Beverage Corp | InPlay Oil vs. BOSTON BEER A | InPlay Oil vs. Molson Coors Beverage |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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