Correlation Between Iofina Plc and Olin
Can any of the company-specific risk be diversified away by investing in both Iofina Plc and Olin 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 Iofina Plc and Olin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iofina plc and Olin Corporation, you can compare the effects of market volatilities on Iofina Plc and Olin 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 Iofina Plc with a short position of Olin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iofina Plc and Olin.
Diversification Opportunities for Iofina Plc and Olin
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iofina and Olin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Iofina plc and Olin Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olin and Iofina Plc 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 Iofina plc are associated (or correlated) with Olin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olin has no effect on the direction of Iofina Plc i.e., Iofina Plc and Olin go up and down completely randomly.
Pair Corralation between Iofina Plc and Olin
Assuming the 90 days horizon Iofina plc is expected to generate 1.6 times more return on investment than Olin. However, Iofina Plc is 1.6 times more volatile than Olin Corporation. It trades about 0.01 of its potential returns per unit of risk. Olin Corporation is currently generating about -0.06 per unit of risk. If you would invest 26.00 in Iofina plc on August 31, 2024 and sell it today you would lose (1.00) from holding Iofina plc or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Iofina plc vs. Olin Corp.
Performance |
| Timeline |
| Iofina plc |
| Olin |
Iofina Plc and Olin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iofina Plc and Olin
The main advantage of trading using opposite Iofina Plc and Olin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iofina Plc position performs unexpectedly, Olin 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 Olin will offset losses from the drop in Olin's long position.| Iofina Plc vs. Sherwin Williams Co | Iofina Plc vs. Air Liquide SA | Iofina Plc vs. LAir Liquide SA | Iofina Plc vs. Air Products and |
| Olin vs. Select Energy Services | Olin vs. Westlake Chemical | Olin vs. Sensient Technologies | Olin vs. Axalta Coating Systems |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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