Correlation Between Integrated Micro and Oriental Petroleum
Can any of the company-specific risk be diversified away by investing in both Integrated Micro and Oriental Petroleum 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 Integrated Micro and Oriental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Micro Electronics and Oriental Petroleum and, you can compare the effects of market volatilities on Integrated Micro and Oriental Petroleum 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 Integrated Micro with a short position of Oriental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and Oriental Petroleum.
Diversification Opportunities for Integrated Micro and Oriental Petroleum
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Integrated and Oriental is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and Oriental Petroleum and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Petroleum and and Integrated Micro 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 Integrated Micro Electronics are associated (or correlated) with Oriental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Petroleum and has no effect on the direction of Integrated Micro i.e., Integrated Micro and Oriental Petroleum go up and down completely randomly.
Pair Corralation between Integrated Micro and Oriental Petroleum
Assuming the 90 days trading horizon Integrated Micro Electronics is expected to generate 0.6 times more return on investment than Oriental Petroleum. However, Integrated Micro Electronics is 1.67 times less risky than Oriental Petroleum. It trades about -0.09 of its potential returns per unit of risk. Oriental Petroleum and is currently generating about -0.18 per unit of risk. If you would invest 172.00 in Integrated Micro Electronics on September 1, 2024 and sell it today you would lose (9.00) from holding Integrated Micro Electronics or give up 5.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Integrated Micro Electronics vs. Oriental Petroleum and
Performance |
| Timeline |
| Integrated Micro Ele |
| Oriental Petroleum and |
Integrated Micro and Oriental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Micro and Oriental Petroleum
The main advantage of trading using opposite Integrated Micro and Oriental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro position performs unexpectedly, Oriental Petroleum 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 Oriental Petroleum will offset losses from the drop in Oriental Petroleum's long position.| Integrated Micro vs. GT Capital Holdings | Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. LFM Properties Corp |
| Oriental Petroleum vs. Integrated Micro Electronics | Oriental Petroleum vs. Robinsons Retail Holdings | Oriental Petroleum vs. Century Pacific Food | Oriental Petroleum vs. Alliance Select Foods |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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