Correlation Between Equinor ASA and Stamper Oil
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Stamper 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 Equinor ASA and Stamper Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinor ASA ADR and Stamper Oil Gas, you can compare the effects of market volatilities on Equinor ASA and Stamper 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 Equinor ASA with a short position of Stamper Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Stamper Oil.
Diversification Opportunities for Equinor ASA and Stamper Oil
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Equinor and Stamper is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA ADR and Stamper Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stamper Oil Gas and Equinor ASA 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 Equinor ASA ADR are associated (or correlated) with Stamper Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stamper Oil Gas has no effect on the direction of Equinor ASA i.e., Equinor ASA and Stamper Oil go up and down completely randomly.
Pair Corralation between Equinor ASA and Stamper Oil
Given the investment horizon of 90 days Equinor ASA ADR is expected to generate 0.94 times more return on investment than Stamper Oil. However, Equinor ASA ADR is 1.06 times less risky than Stamper Oil. It trades about 0.23 of its potential returns per unit of risk. Stamper Oil Gas is currently generating about -0.22 per unit of risk. If you would invest 2,319 in Equinor ASA ADR on October 14, 2024 and sell it today you would earn a total of 208.00 from holding Equinor ASA ADR or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Equinor ASA ADR vs. Stamper Oil Gas
Performance |
| Timeline |
| Equinor ASA ADR |
| Stamper Oil Gas |
Equinor ASA and Stamper Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Stamper Oil
The main advantage of trading using opposite Equinor ASA and Stamper Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Stamper 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 Stamper Oil will offset losses from the drop in Stamper Oil's long position.| Equinor ASA vs. Shell PLC ADR | Equinor ASA vs. BP PLC ADR | Equinor ASA vs. Eni SpA ADR | Equinor ASA vs. Galp Energa |
| Stamper Oil vs. Petroleo Brasileiro Petrobras | Stamper Oil vs. Equinor ASA ADR | Stamper Oil vs. Eni SpA ADR | Stamper Oil vs. YPF Sociedad Anonima |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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