Correlation Between Cornish Metals and ONEOK
Can any of the company-specific risk be diversified away by investing in both Cornish Metals 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 Cornish Metals and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and ONEOK Inc, you can compare the effects of market volatilities on Cornish Metals 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 Cornish Metals with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and ONEOK.
Diversification Opportunities for Cornish Metals and ONEOK
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cornish and ONEOK is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and Cornish Metals 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 Cornish Metals 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 Cornish Metals i.e., Cornish Metals and ONEOK go up and down completely randomly.
Pair Corralation between Cornish Metals and ONEOK
Assuming the 90 days trading horizon Cornish Metals is expected to generate 1.18 times less return on investment than ONEOK. In addition to that, Cornish Metals is 1.51 times more volatile than ONEOK Inc. It trades about 0.1 of its total potential returns per unit of risk. ONEOK Inc is currently generating about 0.18 per unit of volatility. If you would invest 10,200 in ONEOK Inc on October 25, 2024 and sell it today you would earn a total of 520.00 from holding ONEOK Inc or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cornish Metals vs. ONEOK Inc
Performance |
| Timeline |
| Cornish Metals |
| ONEOK Inc |
Cornish Metals and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and ONEOK
The main advantage of trading using opposite Cornish Metals and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals 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.| Cornish Metals vs. Thor Mining PLC | Cornish Metals vs. Blackrock World Mining | Cornish Metals vs. Coeur Mining | Cornish Metals vs. Metals Exploration Plc |
| ONEOK vs. Universal Music Group | ONEOK vs. Cornish Metals | ONEOK vs. Travel Leisure Co | ONEOK vs. Arrow Electronics |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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