Correlation Between Cinis Fertilizer and Africa Oil
Can any of the company-specific risk be diversified away by investing in both Cinis Fertilizer and Africa Oil 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 Cinis Fertilizer and Africa Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinis Fertilizer AB and Africa Oil Corp, you can compare the effects of market volatilities on Cinis Fertilizer and Africa Oil 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 Cinis Fertilizer with a short position of Africa Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinis Fertilizer and Africa Oil.
Diversification Opportunities for Cinis Fertilizer and Africa Oil
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cinis and Africa is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cinis Fertilizer AB and Africa Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Oil Corp and Cinis Fertilizer 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 Cinis Fertilizer AB are associated (or correlated) with Africa Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Oil Corp has no effect on the direction of Cinis Fertilizer i.e., Cinis Fertilizer and Africa Oil go up and down completely randomly.
Pair Corralation between Cinis Fertilizer and Africa Oil
Assuming the 90 days trading horizon Cinis Fertilizer is expected to generate 18.83 times less return on investment than Africa Oil. In addition to that, Cinis Fertilizer is 2.24 times more volatile than Africa Oil Corp. It trades about 0.01 of its total potential returns per unit of risk. Africa Oil Corp is currently generating about 0.3 per unit of volatility. If you would invest 1,352 in Africa Oil Corp on August 28, 2024 and sell it today you would earn a total of 203.00 from holding Africa Oil Corp or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cinis Fertilizer AB vs. Africa Oil Corp
Performance |
| Timeline |
| Cinis Fertilizer |
| Africa Oil Corp |
Cinis Fertilizer and Africa Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinis Fertilizer and Africa Oil
The main advantage of trading using opposite Cinis Fertilizer and Africa Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinis Fertilizer position performs unexpectedly, Africa Oil 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 Africa Oil will offset losses from the drop in Africa Oil's long position.| Cinis Fertilizer vs. SaltX Technology Holding | Cinis Fertilizer vs. AcadeMedia AB | Cinis Fertilizer vs. Bio Works Technologies AB | Cinis Fertilizer vs. Filo Mining Corp |
| Africa Oil vs. International Petroleum | Africa Oil vs. Africa Energy Corp | Africa Oil vs. Africa Oil Corp | Africa Oil 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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