Correlation Between Intelicanna and Petrochemical
Can any of the company-specific risk be diversified away by investing in both Intelicanna and Petrochemical 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 Intelicanna and Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intelicanna and Petrochemical, you can compare the effects of market volatilities on Intelicanna and Petrochemical 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 Intelicanna with a short position of Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intelicanna and Petrochemical.
Diversification Opportunities for Intelicanna and Petrochemical
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intelicanna and Petrochemical is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Intelicanna and Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrochemical and Intelicanna 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 Intelicanna are associated (or correlated) with Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrochemical has no effect on the direction of Intelicanna i.e., Intelicanna and Petrochemical go up and down completely randomly.
Pair Corralation between Intelicanna and Petrochemical
Assuming the 90 days trading horizon Intelicanna is expected to generate 2.46 times more return on investment than Petrochemical. However, Intelicanna is 2.46 times more volatile than Petrochemical. It trades about 0.13 of its potential returns per unit of risk. Petrochemical is currently generating about 0.08 per unit of risk. If you would invest 5,680 in Intelicanna on August 29, 2024 and sell it today you would earn a total of 1,200 from holding Intelicanna or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intelicanna vs. Petrochemical
Performance |
| Timeline |
| Intelicanna |
| Petrochemical |
Intelicanna and Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intelicanna and Petrochemical
The main advantage of trading using opposite Intelicanna and Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelicanna position performs unexpectedly, Petrochemical 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 Petrochemical will offset losses from the drop in Petrochemical's long position.| Intelicanna vs. Cannabotech | Intelicanna vs. Opal Balance | Intelicanna vs. B Communications | Intelicanna vs. Holmes Place International |
| Petrochemical vs. Opal Balance | Petrochemical vs. B Communications | Petrochemical vs. Holmes Place International | Petrochemical vs. Nova |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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