Correlation Between Diageo PLC and ONEOK
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By analyzing existing cross correlation between Diageo PLC ADR and ONEOK INC NEW, you can compare the effects of market volatilities on Diageo PLC 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 Diageo PLC with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diageo PLC and ONEOK.
Diversification Opportunities for Diageo PLC and ONEOK
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diageo and ONEOK is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Diageo PLC ADR and ONEOK INC NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK INC NEW and Diageo PLC 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 Diageo PLC ADR 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 NEW has no effect on the direction of Diageo PLC i.e., Diageo PLC and ONEOK go up and down completely randomly.
Pair Corralation between Diageo PLC and ONEOK
Considering the 90-day investment horizon Diageo PLC ADR is expected to generate 0.52 times more return on investment than ONEOK. However, Diageo PLC ADR is 1.93 times less risky than ONEOK. It trades about 0.12 of its potential returns per unit of risk. ONEOK INC NEW is currently generating about -0.26 per unit of risk. If you would invest 12,059 in Diageo PLC ADR on September 12, 2024 and sell it today you would earn a total of 390.00 from holding Diageo PLC ADR or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Diageo PLC ADR vs. ONEOK INC NEW
Performance |
| Timeline |
| Diageo PLC ADR |
| ONEOK INC NEW |
Diageo PLC and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diageo PLC and ONEOK
The main advantage of trading using opposite Diageo PLC and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diageo PLC 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.| Diageo PLC vs. Andrew Peller Limited | Diageo PLC vs. Naked Wines plc | Diageo PLC vs. Willamette Valley Vineyards | Diageo PLC vs. Splash Beverage Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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