Correlation Between Dimand SA and Motor Oil
Can any of the company-specific risk be diversified away by investing in both Dimand SA and Motor Oil 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 Dimand SA and Motor Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimand SA and Motor Oil Corinth, you can compare the effects of market volatilities on Dimand SA and Motor Oil 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 Dimand SA with a short position of Motor Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimand SA and Motor Oil.
Diversification Opportunities for Dimand SA and Motor Oil
Very poor diversification
The 3 months correlation between Dimand and Motor is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dimand SA and Motor Oil Corinth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motor Oil Corinth and Dimand SA 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 Dimand SA are associated (or correlated) with Motor Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motor Oil Corinth has no effect on the direction of Dimand SA i.e., Dimand SA and Motor Oil go up and down completely randomly.
Pair Corralation between Dimand SA and Motor Oil
Assuming the 90 days trading horizon Dimand SA is expected to under-perform the Motor Oil. But the stock apears to be less risky and, when comparing its historical volatility, Dimand SA is 1.47 times less risky than Motor Oil. The stock trades about -0.1 of its potential returns per unit of risk. The Motor Oil Corinth is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,245 in Motor Oil Corinth on September 2, 2024 and sell it today you would lose (284.00) from holding Motor Oil Corinth or give up 12.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimand SA vs. Motor Oil Corinth
Performance |
| Timeline |
| Dimand SA |
| Motor Oil Corinth |
Dimand SA and Motor Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimand SA and Motor Oil
The main advantage of trading using opposite Dimand SA and Motor Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimand SA position performs unexpectedly, Motor Oil 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 Motor Oil will offset losses from the drop in Motor Oil's long position.| Dimand SA vs. Coca Cola HBC AG | Dimand SA vs. Quest Holdings SA | Dimand SA vs. Motor Oil Corinth | Dimand SA vs. Athens Water Supply |
| Motor Oil vs. Mytilineos SA | Motor Oil vs. Hellenic Petroleum SA | Motor Oil vs. Greek Organization of | Motor Oil vs. Hellenic Telecommunications Organization |
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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