Correlation Between COL Financial and Oriental Petroleum
Can any of the company-specific risk be diversified away by investing in both COL Financial 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 COL Financial and Oriental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COL Financial Group and Oriental Petroleum and, you can compare the effects of market volatilities on COL Financial 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 COL Financial with a short position of Oriental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Financial and Oriental Petroleum.
Diversification Opportunities for COL Financial and Oriental Petroleum
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COL and Oriental is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding COL Financial Group 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 COL Financial 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 COL Financial Group 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 COL Financial i.e., COL Financial and Oriental Petroleum go up and down completely randomly.
Pair Corralation between COL Financial and Oriental Petroleum
Assuming the 90 days trading horizon COL Financial Group is expected to generate 0.49 times more return on investment than Oriental Petroleum. However, COL Financial Group is 2.06 times less risky than Oriental Petroleum. It trades about -0.05 of its potential returns per unit of risk. Oriental Petroleum and is currently generating about -0.06 per unit of risk. If you would invest 184.00 in COL Financial Group on September 5, 2024 and sell it today you would lose (24.00) from holding COL Financial Group or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 45.83% |
| Values | Daily Returns |
COL Financial Group vs. Oriental Petroleum and
Performance |
| Timeline |
| COL Financial Group |
| Oriental Petroleum and |
COL Financial and Oriental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COL Financial and Oriental Petroleum
The main advantage of trading using opposite COL Financial and Oriental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COL Financial 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.| COL Financial vs. Bright Kindle Resources | COL Financial vs. GT Capital Holdings | COL Financial vs. Allhome Corp | COL Financial vs. Jollibee Foods Corp |
| Oriental Petroleum vs. Suntrust Home Developers | Oriental Petroleum vs. Philex Mining Corp | Oriental Petroleum vs. Transpacific Broadband Group | Oriental Petroleum vs. Manila Mining 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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