Correlation Between Eco Oil and Jersey Electricity
Can any of the company-specific risk be diversified away by investing in both Eco Oil and Jersey Electricity 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 Eco Oil and Jersey Electricity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eco Oil Gas and Jersey Electricity plc, you can compare the effects of market volatilities on Eco Oil and Jersey Electricity 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 Eco Oil with a short position of Jersey Electricity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eco Oil and Jersey Electricity.
Diversification Opportunities for Eco Oil and Jersey Electricity
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eco and Jersey is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eco Oil Gas and Jersey Electricity plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jersey Electricity plc and Eco Oil 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 Eco Oil Gas are associated (or correlated) with Jersey Electricity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jersey Electricity plc has no effect on the direction of Eco Oil i.e., Eco Oil and Jersey Electricity go up and down completely randomly.
Pair Corralation between Eco Oil and Jersey Electricity
Assuming the 90 days trading horizon Eco Oil Gas is expected to under-perform the Jersey Electricity. In addition to that, Eco Oil is 3.12 times more volatile than Jersey Electricity plc. It trades about -0.06 of its total potential returns per unit of risk. Jersey Electricity plc is currently generating about 0.01 per unit of volatility. If you would invest 43,272 in Jersey Electricity plc on November 28, 2024 and sell it today you would earn a total of 228.00 from holding Jersey Electricity plc or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eco Oil Gas vs. Jersey Electricity plc
Performance |
| Timeline |
| Eco Oil Gas |
| Jersey Electricity plc |
Eco Oil and Jersey Electricity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eco Oil and Jersey Electricity
The main advantage of trading using opposite Eco Oil and Jersey Electricity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco Oil position performs unexpectedly, Jersey Electricity 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 Jersey Electricity will offset losses from the drop in Jersey Electricity's long position.| Eco Oil vs. Compal Electronics GDR | Eco Oil vs. Mobius Investment Trust | Eco Oil vs. LPKF Laser Electronics | Eco Oil vs. Samsung Electronics Co |
| Jersey Electricity vs. PureTech Health plc | Jersey Electricity vs. Abingdon Health Plc | Jersey Electricity vs. HCA Healthcare | Jersey Electricity vs. Target Healthcare REIT |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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