Correlation Between Cheetah Oil and Sandvik AB
Can any of the company-specific risk be diversified away by investing in both Cheetah Oil and Sandvik AB 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 Cheetah Oil and Sandvik AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheetah Oil Gas and Sandvik AB, you can compare the effects of market volatilities on Cheetah Oil and Sandvik AB 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 Cheetah Oil with a short position of Sandvik AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheetah Oil and Sandvik AB.
Diversification Opportunities for Cheetah Oil and Sandvik AB
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cheetah and Sandvik is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cheetah Oil Gas and Sandvik AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandvik AB and Cheetah Oil 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 Cheetah Oil Gas are associated (or correlated) with Sandvik AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandvik AB has no effect on the direction of Cheetah Oil i.e., Cheetah Oil and Sandvik AB go up and down completely randomly.
Pair Corralation between Cheetah Oil and Sandvik AB
Given the investment horizon of 90 days Cheetah Oil Gas is expected to generate 3.81 times more return on investment than Sandvik AB. However, Cheetah Oil is 3.81 times more volatile than Sandvik AB. It trades about 0.1 of its potential returns per unit of risk. Sandvik AB is currently generating about 0.01 per unit of risk. If you would invest 0.01 in Cheetah Oil Gas on November 2, 2024 and sell it today you would earn a total of 0.01 from holding Cheetah Oil Gas or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.1% |
| Values | Daily Returns |
Cheetah Oil Gas vs. Sandvik AB
Performance |
| Timeline |
| Cheetah Oil Gas |
| Sandvik AB |
Cheetah Oil and Sandvik AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheetah Oil and Sandvik AB
The main advantage of trading using opposite Cheetah Oil and Sandvik AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheetah Oil position performs unexpectedly, Sandvik AB 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 Sandvik AB will offset losses from the drop in Sandvik AB's long position.| Cheetah Oil vs. CNX Resources Corp | Cheetah Oil vs. MV Oil Trust | Cheetah Oil vs. San Juan Basin | Cheetah Oil vs. VOC Energy Trust |
| Sandvik AB vs. Schneider Electric SA | Sandvik AB vs. KONE Oyj | Sandvik AB vs. Atlas Copco AB | Sandvik AB vs. Sandvik AB ADR |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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