Correlation Between Multilaser Industrial and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both Multilaser Industrial and Occidental Petroleum 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 Multilaser Industrial and Occidental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multilaser Industrial SA and Occidental Petroleum, you can compare the effects of market volatilities on Multilaser Industrial and Occidental Petroleum 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 Multilaser Industrial with a short position of Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multilaser Industrial and Occidental Petroleum.
Diversification Opportunities for Multilaser Industrial and Occidental Petroleum
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Multilaser and Occidental is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Multilaser Industrial SA and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum and Multilaser Industrial 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 Multilaser Industrial SA are associated (or correlated) with Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of Multilaser Industrial i.e., Multilaser Industrial and Occidental Petroleum go up and down completely randomly.
Pair Corralation between Multilaser Industrial and Occidental Petroleum
Assuming the 90 days trading horizon Multilaser Industrial SA is expected to under-perform the Occidental Petroleum. In addition to that, Multilaser Industrial is 2.25 times more volatile than Occidental Petroleum. It trades about -0.04 of its total potential returns per unit of risk. Occidental Petroleum is currently generating about 0.03 per unit of volatility. If you would invest 4,652 in Occidental Petroleum on September 4, 2024 and sell it today you would earn a total of 473.00 from holding Occidental Petroleum or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multilaser Industrial SA vs. Occidental Petroleum
Performance |
| Timeline |
| Multilaser Industrial |
| Occidental Petroleum |
Multilaser Industrial and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multilaser Industrial and Occidental Petroleum
The main advantage of trading using opposite Multilaser Industrial and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multilaser Industrial position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| Multilaser Industrial vs. Intelbras SA | Multilaser Industrial vs. Pet Center Comrcio | Multilaser Industrial vs. Locaweb Servios de | Multilaser Industrial vs. Mliuz SA |
| Occidental Petroleum vs. Petro Rio SA | Occidental Petroleum vs. Banco BTG Pactual | Occidental Petroleum vs. Ambipar Participaes e | Occidental Petroleum vs. Mliuz SA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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