Correlation Between Idemitsu Kosan and Blue Earth
Can any of the company-specific risk be diversified away by investing in both Idemitsu Kosan and Blue Earth 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 Idemitsu Kosan and Blue Earth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Idemitsu Kosan CoLtd and Blue Earth Resources, you can compare the effects of market volatilities on Idemitsu Kosan and Blue Earth 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 Idemitsu Kosan with a short position of Blue Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Idemitsu Kosan and Blue Earth.
Diversification Opportunities for Idemitsu Kosan and Blue Earth
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Idemitsu and Blue is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Idemitsu Kosan CoLtd and Blue Earth Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Earth Resources and Idemitsu Kosan 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 Idemitsu Kosan CoLtd are associated (or correlated) with Blue Earth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Earth Resources has no effect on the direction of Idemitsu Kosan i.e., Idemitsu Kosan and Blue Earth go up and down completely randomly.
Pair Corralation between Idemitsu Kosan and Blue Earth
Assuming the 90 days horizon Idemitsu Kosan CoLtd is expected to under-perform the Blue Earth. But the otc stock apears to be less risky and, when comparing its historical volatility, Idemitsu Kosan CoLtd is 50.28 times less risky than Blue Earth. The otc stock trades about -0.13 of its potential returns per unit of risk. The Blue Earth Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.40 in Blue Earth Resources on October 22, 2024 and sell it today you would earn a total of 3.40 from holding Blue Earth Resources or generate 242.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.86% |
| Values | Daily Returns |
Idemitsu Kosan CoLtd vs. Blue Earth Resources
Performance |
| Timeline |
| Idemitsu Kosan CoLtd |
| Blue Earth Resources |
Idemitsu Kosan and Blue Earth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Idemitsu Kosan and Blue Earth
The main advantage of trading using opposite Idemitsu Kosan and Blue Earth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idemitsu Kosan position performs unexpectedly, Blue Earth 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 Blue Earth will offset losses from the drop in Blue Earth's long position.| Idemitsu Kosan vs. Eneos Holdings ADR | Idemitsu Kosan vs. HF Sinclair Corp | Idemitsu Kosan vs. Idemitsu Kosan Co | Idemitsu Kosan vs. PBF Energy |
| Blue Earth vs. Delek Energy | Blue Earth vs. PBF Energy | Blue Earth vs. HF Sinclair Corp | Blue Earth vs. Delek Logistics Partners |
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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