Correlation Between Oil Gas and Emerald Banking
Can any of the company-specific risk be diversified away by investing in both Oil Gas and Emerald Banking 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 Oil Gas and Emerald Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Emerald Banking And, you can compare the effects of market volatilities on Oil Gas and Emerald Banking 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 Oil Gas with a short position of Emerald Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Emerald Banking.
Diversification Opportunities for Oil Gas and Emerald Banking
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oil and Emerald is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Emerald Banking And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Banking And and Oil Gas 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 Oil Gas Ultrasector are associated (or correlated) with Emerald Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Banking And has no effect on the direction of Oil Gas i.e., Oil Gas and Emerald Banking go up and down completely randomly.
Pair Corralation between Oil Gas and Emerald Banking
Assuming the 90 days horizon Oil Gas is expected to generate 1.73 times less return on investment than Emerald Banking. In addition to that, Oil Gas is 1.19 times more volatile than Emerald Banking And. It trades about 0.03 of its total potential returns per unit of risk. Emerald Banking And is currently generating about 0.05 per unit of volatility. If you would invest 2,268 in Emerald Banking And on August 30, 2024 and sell it today you would earn a total of 989.00 from holding Emerald Banking And or generate 43.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Emerald Banking And
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Emerald Banking And |
Oil Gas and Emerald Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Emerald Banking
The main advantage of trading using opposite Oil Gas and Emerald Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas position performs unexpectedly, Emerald Banking 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 Emerald Banking will offset losses from the drop in Emerald Banking's long position.| Oil Gas vs. Direxion Monthly Nasdaq 100 | Oil Gas vs. HUMANA INC | Oil Gas vs. Aquagold International | Oil Gas vs. Barloworld Ltd ADR |
| Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Rmb Mendon Financial |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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