Correlation Between CAP LEASE and ONEOK
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and ONEOK 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 CAP LEASE and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and ONEOK Inc, you can compare the effects of market volatilities on CAP LEASE and ONEOK 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 CAP LEASE with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and ONEOK.
Diversification Opportunities for CAP LEASE and ONEOK
Pay attention - limited upside
The 3 months correlation between CAP and ONEOK is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of CAP LEASE i.e., CAP LEASE and ONEOK go up and down completely randomly.
Pair Corralation between CAP LEASE and ONEOK
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to generate 0.64 times more return on investment than ONEOK. However, CAP LEASE AVIATION is 1.57 times less risky than ONEOK. It trades about 0.01 of its potential returns per unit of risk. ONEOK Inc is currently generating about -0.36 per unit of risk. If you would invest 50.00 in CAP LEASE AVIATION on September 23, 2024 and sell it today you would earn a total of 0.00 from holding CAP LEASE AVIATION or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. ONEOK Inc
Performance |
| Timeline |
| CAP LEASE AVIATION |
| ONEOK Inc |
CAP LEASE and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and ONEOK
The main advantage of trading using opposite CAP LEASE and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| CAP LEASE vs. DXC Technology Co | CAP LEASE vs. International Biotechnology Trust | CAP LEASE vs. Liontrust Asset Management | CAP LEASE vs. Albion Technology General |
| ONEOK vs. Fevertree Drinks Plc | ONEOK vs. Foresight Environmental Infrastructure | ONEOK vs. Fortune Brands Home | ONEOK vs. Silver Bullet Data |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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