Correlation Between Imperial Oil and Aquagold International
Can any of the company-specific risk be diversified away by investing in both Imperial Oil and Aquagold International 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 Imperial Oil and Aquagold International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Oil and Aquagold International, you can compare the effects of market volatilities on Imperial Oil and Aquagold International 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 Imperial Oil with a short position of Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Oil and Aquagold International.
Diversification Opportunities for Imperial Oil and Aquagold International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Imperial and Aquagold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Oil and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Imperial Oil 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 Imperial Oil are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Imperial Oil i.e., Imperial Oil and Aquagold International go up and down completely randomly.
Pair Corralation between Imperial Oil and Aquagold International
Considering the 90-day investment horizon Imperial Oil is expected to generate 0.3 times more return on investment than Aquagold International. However, Imperial Oil is 3.3 times less risky than Aquagold International. It trades about 0.05 of its potential returns per unit of risk. Aquagold International is currently generating about -0.03 per unit of risk. If you would invest 5,577 in Imperial Oil on September 14, 2024 and sell it today you would earn a total of 1,172 from holding Imperial Oil or generate 21.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Imperial Oil vs. Aquagold International
Performance |
| Timeline |
| Imperial Oil |
| Aquagold International |
Imperial Oil and Aquagold International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Oil and Aquagold International
The main advantage of trading using opposite Imperial Oil and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Oil position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.| Imperial Oil vs. Suncor Energy | Imperial Oil vs. Ecopetrol SA ADR | Imperial Oil vs. Petroleo Brasileiro Petrobras | Imperial Oil vs. Equinor ASA ADR |
| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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