Correlation Between Asia United and Oriental Petroleum
Can any of the company-specific risk be diversified away by investing in both Asia United and Oriental Petroleum 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 Asia United and Oriental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia United Bank and Oriental Petroleum and, you can compare the effects of market volatilities on Asia United and Oriental Petroleum 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 Asia United with a short position of Oriental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia United and Oriental Petroleum.
Diversification Opportunities for Asia United and Oriental Petroleum
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Oriental is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Asia United Bank and Oriental Petroleum and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Petroleum and and Asia United 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 Asia United Bank are associated (or correlated) with Oriental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Petroleum and has no effect on the direction of Asia United i.e., Asia United and Oriental Petroleum go up and down completely randomly.
Pair Corralation between Asia United and Oriental Petroleum
Assuming the 90 days trading horizon Asia United Bank is expected to generate 0.38 times more return on investment than Oriental Petroleum. However, Asia United Bank is 2.66 times less risky than Oriental Petroleum. It trades about 0.13 of its potential returns per unit of risk. Oriental Petroleum and is currently generating about -0.03 per unit of risk. If you would invest 2,487 in Asia United Bank on September 13, 2024 and sell it today you would earn a total of 3,763 from holding Asia United Bank or generate 151.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 34.59% |
| Values | Daily Returns |
Asia United Bank vs. Oriental Petroleum and
Performance |
| Timeline |
| Asia United Bank |
| Oriental Petroleum and |
Asia United and Oriental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia United and Oriental Petroleum
The main advantage of trading using opposite Asia United and Oriental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia United position performs unexpectedly, Oriental Petroleum 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 Oriental Petroleum will offset losses from the drop in Oriental Petroleum's long position.| Asia United vs. National Reinsurance | Asia United vs. Prime Media Holdings | Asia United vs. Crown Asia Chemicals | Asia United vs. Pacificonline Systems |
| Oriental Petroleum vs. Asia United Bank | Oriental Petroleum vs. Apex Mining Co | Oriental Petroleum vs. Security Bank Corp | Oriental Petroleum vs. Concepcion Industrial Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |