Correlation Between ConocoPhillips and S1YM34
Can any of the company-specific risk be diversified away by investing in both ConocoPhillips and S1YM34 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 ConocoPhillips and S1YM34 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConocoPhillips and S1YM34, you can compare the effects of market volatilities on ConocoPhillips and S1YM34 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 ConocoPhillips with a short position of S1YM34. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConocoPhillips and S1YM34.
Diversification Opportunities for ConocoPhillips and S1YM34
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ConocoPhillips and S1YM34 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ConocoPhillips and S1YM34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S1YM34 and ConocoPhillips 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 ConocoPhillips are associated (or correlated) with S1YM34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S1YM34 has no effect on the direction of ConocoPhillips i.e., ConocoPhillips and S1YM34 go up and down completely randomly.
Pair Corralation between ConocoPhillips and S1YM34
Assuming the 90 days trading horizon ConocoPhillips is expected to generate 7.58 times less return on investment than S1YM34. But when comparing it to its historical volatility, ConocoPhillips is 1.4 times less risky than S1YM34. It trades about 0.02 of its potential returns per unit of risk. S1YM34 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,340 in S1YM34 on September 25, 2024 and sell it today you would earn a total of 6,553 from holding S1YM34 or generate 57.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
ConocoPhillips vs. S1YM34
Performance |
| Timeline |
| ConocoPhillips |
| S1YM34 |
ConocoPhillips and S1YM34 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConocoPhillips and S1YM34
The main advantage of trading using opposite ConocoPhillips and S1YM34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConocoPhillips position performs unexpectedly, S1YM34 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 S1YM34 will offset losses from the drop in S1YM34's long position.| ConocoPhillips vs. EOG Resources | ConocoPhillips vs. Occidental Petroleum | ConocoPhillips vs. Devon Energy | ConocoPhillips vs. H1ES34 |
| S1YM34 vs. The Home Depot | S1YM34 vs. MAHLE Metal Leve | S1YM34 vs. Nordon Indstrias Metalrgicas | S1YM34 vs. Bemobi Mobile Tech |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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