Correlation Between Motor Oil and Deceuninck
Can any of the company-specific risk be diversified away by investing in both Motor Oil and Deceuninck 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 Deceuninck 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 Deceuninck, you can compare the effects of market volatilities on Motor Oil and Deceuninck 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 Deceuninck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motor Oil and Deceuninck.
Diversification Opportunities for Motor Oil and Deceuninck
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Motor and Deceuninck is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and Deceuninck in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deceuninck 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 Deceuninck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deceuninck has no effect on the direction of Motor Oil i.e., Motor Oil and Deceuninck go up and down completely randomly.
Pair Corralation between Motor Oil and Deceuninck
Assuming the 90 days trading horizon Motor Oil Corinth is expected to under-perform the Deceuninck. In addition to that, Motor Oil is 1.02 times more volatile than Deceuninck. It trades about -0.08 of its total potential returns per unit of risk. Deceuninck is currently generating about -0.08 per unit of volatility. If you would invest 236.00 in Deceuninck on August 30, 2024 and sell it today you would lose (6.00) from holding Deceuninck or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Motor Oil Corinth vs. Deceuninck
Performance |
| Timeline |
| Motor Oil Corinth |
| Deceuninck |
Motor Oil and Deceuninck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motor Oil and Deceuninck
The main advantage of trading using opposite Motor Oil and Deceuninck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motor Oil position performs unexpectedly, Deceuninck 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 Deceuninck will offset losses from the drop in Deceuninck'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 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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