Correlation Between HP and ONEOK
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By analyzing existing cross correlation between HP Inc and ONEOK PARTNERS L, you can compare the effects of market volatilities on HP and ONEOK 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 HP with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and ONEOK.
Diversification Opportunities for HP and ONEOK
Very good diversification
The 3 months correlation between HP and ONEOK is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and ONEOK PARTNERS L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK PARTNERS L and HP 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 HP Inc are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK PARTNERS L has no effect on the direction of HP i.e., HP and ONEOK go up and down completely randomly.
Pair Corralation between HP and ONEOK
Considering the 90-day investment horizon HP Inc is expected to under-perform the ONEOK. In addition to that, HP is 2.36 times more volatile than ONEOK PARTNERS L. It trades about -0.09 of its total potential returns per unit of risk. ONEOK PARTNERS L is currently generating about 0.02 per unit of volatility. If you would invest 10,834 in ONEOK PARTNERS L on August 30, 2024 and sell it today you would earn a total of 28.00 from holding ONEOK PARTNERS L or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
HP Inc vs. ONEOK PARTNERS L
Performance |
| Timeline |
| HP Inc |
| ONEOK PARTNERS L |
HP and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and ONEOK
The main advantage of trading using opposite HP and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.The idea behind HP Inc and ONEOK PARTNERS L pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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