Correlation Between Boliden AB and International Petroleum
Can any of the company-specific risk be diversified away by investing in both Boliden AB and International 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 Boliden AB and International Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB and International Petroleum, you can compare the effects of market volatilities on Boliden AB and International 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 Boliden AB with a short position of International Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and International Petroleum.
Diversification Opportunities for Boliden AB and International Petroleum
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boliden and International is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB and International Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Petroleum and Boliden AB 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 Boliden AB are associated (or correlated) with International Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Petroleum has no effect on the direction of Boliden AB i.e., Boliden AB and International Petroleum go up and down completely randomly.
Pair Corralation between Boliden AB and International Petroleum
Assuming the 90 days trading horizon Boliden AB is expected to generate 1.92 times less return on investment than International Petroleum. But when comparing it to its historical volatility, Boliden AB is 1.13 times less risky than International Petroleum. It trades about 0.28 of its potential returns per unit of risk. International Petroleum is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 12,530 in International Petroleum on October 26, 2024 and sell it today you would earn a total of 2,190 from holding International Petroleum or generate 17.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boliden AB vs. International Petroleum
Performance |
| Timeline |
| Boliden AB |
| International Petroleum |
Boliden AB and International Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and International Petroleum
The main advantage of trading using opposite Boliden AB and International Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB position performs unexpectedly, International 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 International Petroleum will offset losses from the drop in International Petroleum's long position.| Boliden AB vs. Sandvik AB | Boliden AB vs. AB SKF | Boliden AB vs. Alfa Laval AB | Boliden AB vs. AB Electrolux |
| International Petroleum vs. Africa Oil Corp | International Petroleum vs. International Petroleum Corp | International Petroleum vs. Lundin Mining |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| 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 | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |