Correlation Between Melisron and Paz Oil
Can any of the company-specific risk be diversified away by investing in both Melisron and Paz 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 Melisron and Paz Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melisron and Paz Oil, you can compare the effects of market volatilities on Melisron and Paz 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 Melisron with a short position of Paz Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melisron and Paz Oil.
Diversification Opportunities for Melisron and Paz Oil
Very poor diversification
The 3 months correlation between Melisron and Paz is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Melisron and Paz Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paz Oil and Melisron 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 Melisron are associated (or correlated) with Paz Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paz Oil has no effect on the direction of Melisron i.e., Melisron and Paz Oil go up and down completely randomly.
Pair Corralation between Melisron and Paz Oil
Assuming the 90 days trading horizon Melisron is expected to generate 1.1 times less return on investment than Paz Oil. But when comparing it to its historical volatility, Melisron is 1.16 times less risky than Paz Oil. It trades about 0.17 of its potential returns per unit of risk. Paz Oil is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,292,627 in Paz Oil on September 2, 2024 and sell it today you would earn a total of 1,047,373 from holding Paz Oil or generate 31.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melisron vs. Paz Oil
Performance |
| Timeline |
| Melisron |
| Paz Oil |
Melisron and Paz Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melisron and Paz Oil
The main advantage of trading using opposite Melisron and Paz Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melisron position performs unexpectedly, Paz 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 Paz Oil will offset losses from the drop in Paz Oil's long position.| Melisron vs. Azrieli Group | Melisron vs. Alony Hetz Properties | Melisron vs. Amot Investments | Melisron vs. Bank Leumi Le Israel |
| Paz Oil vs. Fattal 1998 Holdings | Paz Oil vs. El Al Israel | Paz Oil vs. Bank Leumi Le Israel | Paz Oil vs. Teva Pharmaceutical Industries |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world |