Correlation Between Africa Oil and VIMAB Group
Can any of the company-specific risk be diversified away by investing in both Africa Oil and VIMAB Group 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 Africa Oil and VIMAB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Africa Oil Corp and VIMAB Group AB, you can compare the effects of market volatilities on Africa Oil and VIMAB Group 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 Africa Oil with a short position of VIMAB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Africa Oil and VIMAB Group.
Diversification Opportunities for Africa Oil and VIMAB Group
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Africa and VIMAB is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Africa Oil Corp and VIMAB Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIMAB Group AB and Africa 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 Africa Oil Corp are associated (or correlated) with VIMAB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIMAB Group AB has no effect on the direction of Africa Oil i.e., Africa Oil and VIMAB Group go up and down completely randomly.
Pair Corralation between Africa Oil and VIMAB Group
Assuming the 90 days trading horizon Africa Oil Corp is expected to under-perform the VIMAB Group. But the stock apears to be less risky and, when comparing its historical volatility, Africa Oil Corp is 3.13 times less risky than VIMAB Group. The stock trades about -0.01 of its potential returns per unit of risk. The VIMAB Group AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 840.00 in VIMAB Group AB on August 27, 2024 and sell it today you would lose (90.00) from holding VIMAB Group AB or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Africa Oil Corp vs. VIMAB Group AB
Performance |
| Timeline |
| Africa Oil Corp |
| VIMAB Group AB |
Africa Oil and VIMAB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Africa Oil and VIMAB Group
The main advantage of trading using opposite Africa Oil and VIMAB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Africa Oil position performs unexpectedly, VIMAB Group 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 VIMAB Group will offset losses from the drop in VIMAB Group's long position.| Africa Oil vs. SolTech Energy Sweden | Africa Oil vs. Minesto AB | Africa Oil vs. SaltX Technology Holding | Africa Oil vs. Impact Coatings publ |
| VIMAB Group vs. Vitec Software Group | VIMAB Group vs. SaltX Technology Holding | VIMAB Group vs. JLT Mobile Computers | VIMAB Group vs. Media and Games |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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