Correlation Between Motor Oil and Bioter SA
Can any of the company-specific risk be diversified away by investing in both Motor Oil and Bioter SA 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 Motor Oil and Bioter SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Motor Oil Corinth and Bioter SA, you can compare the effects of market volatilities on Motor Oil and Bioter SA 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 Motor Oil with a short position of Bioter SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motor Oil and Bioter SA.
Diversification Opportunities for Motor Oil and Bioter SA
Pay attention - limited upside
The 3 months correlation between Motor and Bioter is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and Bioter SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioter SA and Motor Oil 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 Motor Oil Corinth are associated (or correlated) with Bioter SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioter SA has no effect on the direction of Motor Oil i.e., Motor Oil and Bioter SA go up and down completely randomly.
Pair Corralation between Motor Oil and Bioter SA
Assuming the 90 days trading horizon Motor Oil Corinth is expected to under-perform the Bioter SA. But the stock apears to be less risky and, when comparing its historical volatility, Motor Oil Corinth is 3.75 times less risky than Bioter SA. The stock trades about -0.14 of its potential returns per unit of risk. The Bioter SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Bioter SA on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Bioter SA or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Motor Oil Corinth vs. Bioter SA
Performance |
| Timeline |
| Motor Oil Corinth |
| Bioter SA |
Motor Oil and Bioter SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motor Oil and Bioter SA
The main advantage of trading using opposite Motor Oil and Bioter SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motor Oil position performs unexpectedly, Bioter SA 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 Bioter SA will offset losses from the drop in Bioter SA's long position.| Motor Oil vs. Mytilineos SA | Motor Oil vs. Hellenic Petroleum SA | Motor Oil vs. Greek Organization of | Motor Oil vs. Hellenic Telecommunications Organization |
| Bioter SA vs. Avax SA | Bioter SA vs. Ekter SA | Bioter SA vs. Intracom Constructions Societe | Bioter SA vs. Alumil Aluminium Industry |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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