Correlation Between Financiera Independencia and Cabot Oil
Can any of the company-specific risk be diversified away by investing in both Financiera Independencia and Cabot 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 Financiera Independencia and Cabot Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financiera Independencia SAB and Cabot Oil Gas, you can compare the effects of market volatilities on Financiera Independencia and Cabot 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 Financiera Independencia with a short position of Cabot Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financiera Independencia and Cabot Oil.
Diversification Opportunities for Financiera Independencia and Cabot Oil
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Financiera and Cabot is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Financiera Independencia SAB and Cabot Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot Oil Gas and Financiera Independencia 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 Financiera Independencia SAB are associated (or correlated) with Cabot Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot Oil Gas has no effect on the direction of Financiera Independencia i.e., Financiera Independencia and Cabot Oil go up and down completely randomly.
Pair Corralation between Financiera Independencia and Cabot Oil
Assuming the 90 days trading horizon Financiera Independencia SAB is expected to under-perform the Cabot Oil. But the stock apears to be less risky and, when comparing its historical volatility, Financiera Independencia SAB is 4.07 times less risky than Cabot Oil. The stock trades about -0.22 of its potential returns per unit of risk. The Cabot Oil Gas is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 49,379 in Cabot Oil Gas on September 12, 2024 and sell it today you would earn a total of 4,921 from holding Cabot Oil Gas or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financiera Independencia SAB vs. Cabot Oil Gas
Performance |
| Timeline |
| Financiera Independencia |
| Cabot Oil Gas |
Financiera Independencia and Cabot Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financiera Independencia and Cabot Oil
The main advantage of trading using opposite Financiera Independencia and Cabot Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financiera Independencia position performs unexpectedly, Cabot 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 Cabot Oil will offset losses from the drop in Cabot Oil's long position.| Financiera Independencia vs. UnitedHealth Group Incorporated | Financiera Independencia vs. McEwen Mining | Financiera Independencia vs. Grupo Carso SAB | Financiera Independencia vs. FibraHotel |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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