Correlation Between InPlay Oil and Wilmington Capital
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Wilmington Capital 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 InPlay Oil and Wilmington Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Wilmington Capital Management, you can compare the effects of market volatilities on InPlay Oil and Wilmington Capital 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 InPlay Oil with a short position of Wilmington Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Wilmington Capital.
Diversification Opportunities for InPlay Oil and Wilmington Capital
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InPlay and Wilmington is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Wilmington Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Capital and InPlay 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 InPlay Oil Corp are associated (or correlated) with Wilmington Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Capital has no effect on the direction of InPlay Oil i.e., InPlay Oil and Wilmington Capital go up and down completely randomly.
Pair Corralation between InPlay Oil and Wilmington Capital
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Wilmington Capital. In addition to that, InPlay Oil is 14.91 times more volatile than Wilmington Capital Management. It trades about -0.21 of its total potential returns per unit of risk. Wilmington Capital Management is currently generating about -0.22 per unit of volatility. If you would invest 231.00 in Wilmington Capital Management on November 4, 2024 and sell it today you would lose (1.00) from holding Wilmington Capital Management or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
InPlay Oil Corp vs. Wilmington Capital Management
Performance |
| Timeline |
| InPlay Oil Corp |
| Wilmington Capital |
InPlay Oil and Wilmington Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Wilmington Capital
The main advantage of trading using opposite InPlay Oil and Wilmington Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Wilmington Capital 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 Wilmington Capital will offset losses from the drop in Wilmington Capital's long position.| InPlay Oil vs. Prairie Provident Resources | InPlay Oil vs. Pine Cliff Energy | InPlay Oil vs. Southern Energy Corp | InPlay Oil vs. iShares Canadian HYBrid |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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