Correlation Between ABC TRANSPORT and INTERNATIONAL ENERGY
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By analyzing existing cross correlation between ABC TRANSPORT PLC and INTERNATIONAL ENERGY INSURANCE, you can compare the effects of market volatilities on ABC TRANSPORT and INTERNATIONAL ENERGY 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 ABC TRANSPORT with a short position of INTERNATIONAL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABC TRANSPORT and INTERNATIONAL ENERGY.
Diversification Opportunities for ABC TRANSPORT and INTERNATIONAL ENERGY
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABC and INTERNATIONAL is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding ABC TRANSPORT PLC and INTERNATIONAL ENERGY INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL ENERGY and ABC TRANSPORT 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 ABC TRANSPORT PLC are associated (or correlated) with INTERNATIONAL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL ENERGY has no effect on the direction of ABC TRANSPORT i.e., ABC TRANSPORT and INTERNATIONAL ENERGY go up and down completely randomly.
Pair Corralation between ABC TRANSPORT and INTERNATIONAL ENERGY
Assuming the 90 days trading horizon ABC TRANSPORT PLC is expected to under-perform the INTERNATIONAL ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, ABC TRANSPORT PLC is 1.0 times less risky than INTERNATIONAL ENERGY. The stock trades about -0.05 of its potential returns per unit of risk. The INTERNATIONAL ENERGY INSURANCE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 145.00 in INTERNATIONAL ENERGY INSURANCE on October 24, 2024 and sell it today you would earn a total of 45.00 from holding INTERNATIONAL ENERGY INSURANCE or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABC TRANSPORT PLC vs. INTERNATIONAL ENERGY INSURANCE
Performance |
| Timeline |
| ABC TRANSPORT PLC |
| INTERNATIONAL ENERGY |
ABC TRANSPORT and INTERNATIONAL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABC TRANSPORT and INTERNATIONAL ENERGY
The main advantage of trading using opposite ABC TRANSPORT and INTERNATIONAL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABC TRANSPORT position performs unexpectedly, INTERNATIONAL ENERGY 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 INTERNATIONAL ENERGY will offset losses from the drop in INTERNATIONAL ENERGY's long position.| ABC TRANSPORT vs. CHAMPION BREWERIES PLC | ABC TRANSPORT vs. ZENITH BANK PLC | ABC TRANSPORT vs. MULTI TREX INTEGRATED FOODS | ABC TRANSPORT vs. AXAMANSARD INSURANCE PLC |
| INTERNATIONAL ENERGY vs. FIDELITY BANK PLC | INTERNATIONAL ENERGY vs. STACO INSURANCE PLC | INTERNATIONAL ENERGY vs. STERLING FINANCIAL HOLDINGS | INTERNATIONAL ENERGY vs. AFROMEDIA PLC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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