Correlation Between Inpex Corp and Battalion Oil
Can any of the company-specific risk be diversified away by investing in both Inpex Corp and Battalion Oil 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 Inpex Corp and Battalion Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inpex Corp ADR and Battalion Oil Corp, you can compare the effects of market volatilities on Inpex Corp and Battalion Oil 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 Inpex Corp with a short position of Battalion Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inpex Corp and Battalion Oil.
Diversification Opportunities for Inpex Corp and Battalion Oil
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inpex and Battalion is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Inpex Corp ADR and Battalion Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battalion Oil Corp and Inpex Corp 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 Inpex Corp ADR are associated (or correlated) with Battalion Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battalion Oil Corp has no effect on the direction of Inpex Corp i.e., Inpex Corp and Battalion Oil go up and down completely randomly.
Pair Corralation between Inpex Corp and Battalion Oil
Assuming the 90 days horizon Inpex Corp ADR is expected to under-perform the Battalion Oil. But the pink sheet apears to be less risky and, when comparing its historical volatility, Inpex Corp ADR is 3.74 times less risky than Battalion Oil. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Battalion Oil Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 175.00 in Battalion Oil Corp on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Battalion Oil Corp or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inpex Corp ADR vs. Battalion Oil Corp
Performance |
| Timeline |
| Inpex Corp ADR |
| Battalion Oil Corp |
Inpex Corp and Battalion Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inpex Corp and Battalion Oil
The main advantage of trading using opposite Inpex Corp and Battalion Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inpex Corp position performs unexpectedly, Battalion Oil 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 Battalion Oil will offset losses from the drop in Battalion Oil's long position.| Inpex Corp vs. San Leon Energy | Inpex Corp vs. Enwell Energy plc | Inpex Corp vs. Dno ASA | Inpex Corp vs. Questerre Energy |
| Battalion Oil vs. Epsilon Energy | Battalion Oil vs. Citizens Community Bancorp | Battalion Oil vs. Perma Pipe International Holdings | Battalion Oil vs. Amplify Energy Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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