Correlation Between International Petroleum and PolyPlank Publ
Can any of the company-specific risk be diversified away by investing in both International Petroleum and PolyPlank Publ 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 International Petroleum and PolyPlank Publ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Petroleum and PolyPlank publ AB, you can compare the effects of market volatilities on International Petroleum and PolyPlank Publ 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 International Petroleum with a short position of PolyPlank Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Petroleum and PolyPlank Publ.
Diversification Opportunities for International Petroleum and PolyPlank Publ
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and PolyPlank is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding International Petroleum and PolyPlank publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PolyPlank publ AB and International Petroleum 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 International Petroleum are associated (or correlated) with PolyPlank Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PolyPlank publ AB has no effect on the direction of International Petroleum i.e., International Petroleum and PolyPlank Publ go up and down completely randomly.
Pair Corralation between International Petroleum and PolyPlank Publ
Assuming the 90 days trading horizon International Petroleum is expected to generate 0.41 times more return on investment than PolyPlank Publ. However, International Petroleum is 2.45 times less risky than PolyPlank Publ. It trades about 0.08 of its potential returns per unit of risk. PolyPlank publ AB is currently generating about -0.05 per unit of risk. If you would invest 12,050 in International Petroleum on September 1, 2024 and sell it today you would earn a total of 360.00 from holding International Petroleum or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Petroleum vs. PolyPlank publ AB
Performance |
| Timeline |
| International Petroleum |
| PolyPlank publ AB |
International Petroleum and PolyPlank Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Petroleum and PolyPlank Publ
The main advantage of trading using opposite International Petroleum and PolyPlank Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Petroleum position performs unexpectedly, PolyPlank Publ 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 PolyPlank Publ will offset losses from the drop in PolyPlank Publ's long position.| International Petroleum vs. Africa Oil Corp | International Petroleum vs. International Petroleum Corp | International Petroleum vs. Lundin Mining |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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