Correlation Between Mecanica Fina and Oil Terminal
Can any of the company-specific risk be diversified away by investing in both Mecanica Fina and Oil Terminal 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 Mecanica Fina and Oil Terminal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mecanica Fina SA and Oil Terminal C, you can compare the effects of market volatilities on Mecanica Fina and Oil Terminal 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 Mecanica Fina with a short position of Oil Terminal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mecanica Fina and Oil Terminal.
Diversification Opportunities for Mecanica Fina and Oil Terminal
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mecanica and Oil is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mecanica Fina SA and Oil Terminal C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Terminal C and Mecanica Fina 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 Mecanica Fina SA are associated (or correlated) with Oil Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Terminal C has no effect on the direction of Mecanica Fina i.e., Mecanica Fina and Oil Terminal go up and down completely randomly.
Pair Corralation between Mecanica Fina and Oil Terminal
Assuming the 90 days trading horizon Mecanica Fina SA is expected to under-perform the Oil Terminal. In addition to that, Mecanica Fina is 1.54 times more volatile than Oil Terminal C. It trades about -0.04 of its total potential returns per unit of risk. Oil Terminal C is currently generating about 0.01 per unit of volatility. If you would invest 12.00 in Oil Terminal C on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Oil Terminal C or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.82% |
| Values | Daily Returns |
Mecanica Fina SA vs. Oil Terminal C
Performance |
| Timeline |
| Mecanica Fina SA |
| Oil Terminal C |
Mecanica Fina and Oil Terminal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mecanica Fina and Oil Terminal
The main advantage of trading using opposite Mecanica Fina and Oil Terminal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mecanica Fina position performs unexpectedly, Oil Terminal 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 Oil Terminal will offset losses from the drop in Oil Terminal's long position.| Mecanica Fina vs. Oil Terminal C | Mecanica Fina vs. Antibiotice Ia | Mecanica Fina vs. Aages SA | Mecanica Fina vs. Alumil Rom Industry |
| Oil Terminal vs. Patria Bank SA | Oil Terminal vs. Infinity Capital Investments | Oil Terminal vs. Biofarm Bucure | Oil Terminal vs. AROBS TRANSILVANIA SOFTWARE |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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