Correlation Between The Arbitrage and Oil Gas
Can any of the company-specific risk be diversified away by investing in both The Arbitrage and Oil Gas 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 The Arbitrage and Oil Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arbitrage Fund and Oil Gas Ultrasector, you can compare the effects of market volatilities on The Arbitrage and Oil Gas 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 The Arbitrage with a short position of Oil Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Arbitrage and Oil Gas.
Diversification Opportunities for The Arbitrage and Oil Gas
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between The and Oil is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Fund and Oil Gas Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Gas Ultrasector and The Arbitrage 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 The Arbitrage Fund are associated (or correlated) with Oil Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Gas Ultrasector has no effect on the direction of The Arbitrage i.e., The Arbitrage and Oil Gas go up and down completely randomly.
Pair Corralation between The Arbitrage and Oil Gas
Assuming the 90 days horizon The Arbitrage is expected to generate 29.33 times less return on investment than Oil Gas. But when comparing it to its historical volatility, The Arbitrage Fund is 5.79 times less risky than Oil Gas. It trades about 0.05 of its potential returns per unit of risk. Oil Gas Ultrasector is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,660 in Oil Gas Ultrasector on September 3, 2024 and sell it today you would earn a total of 328.00 from holding Oil Gas Ultrasector or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Arbitrage Fund vs. Oil Gas Ultrasector
Performance |
| Timeline |
| The Arbitrage |
| Oil Gas Ultrasector |
The Arbitrage and Oil Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Arbitrage and Oil Gas
The main advantage of trading using opposite The Arbitrage and Oil Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Arbitrage position performs unexpectedly, Oil Gas 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 Oil Gas will offset losses from the drop in Oil Gas' long position.| The Arbitrage vs. Barings Emerging Markets | The Arbitrage vs. Dodge Cox Emerging | The Arbitrage vs. Nasdaq 100 2x Strategy | The Arbitrage vs. Rbc Emerging Markets |
| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |