Correlation Between Inpex Corp and United Energy
Can any of the company-specific risk be diversified away by investing in both Inpex Corp and United Energy 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 United Energy 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 United Energy Corp, you can compare the effects of market volatilities on Inpex Corp and United Energy 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 United Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inpex Corp and United Energy.
Diversification Opportunities for Inpex Corp and United Energy
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inpex and United is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inpex Corp ADR and United Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Energy 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 United Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Energy Corp has no effect on the direction of Inpex Corp i.e., Inpex Corp and United Energy go up and down completely randomly.
Pair Corralation between Inpex Corp and United Energy
Assuming the 90 days horizon Inpex Corp ADR is expected to under-perform the United Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Inpex Corp ADR is 5.42 times less risky than United Energy. The pink sheet trades about -0.02 of its potential returns per unit of risk. The United Energy Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.70 in United Energy Corp on November 3, 2024 and sell it today you would earn a total of 0.25 from holding United Energy Corp or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Inpex Corp ADR vs. United Energy Corp
Performance |
| Timeline |
| Inpex Corp ADR |
| United Energy Corp |
Inpex Corp and United Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inpex Corp and United Energy
The main advantage of trading using opposite Inpex Corp and United Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inpex Corp position performs unexpectedly, United Energy 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 United Energy will offset losses from the drop in United Energy'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 |
| United Energy vs. Piedmont Lithium Ltd | United Energy vs. Sigma Lithium Resources | United Energy vs. Standard Lithium | United Energy vs. MP Materials 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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