Correlation Between Motor Oil and Ideal Group
Can any of the company-specific risk be diversified away by investing in both Motor Oil and Ideal Group 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 Ideal Group 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 Ideal Group SA, you can compare the effects of market volatilities on Motor Oil and Ideal Group 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 Ideal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motor Oil and Ideal Group.
Diversification Opportunities for Motor Oil and Ideal Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Motor and Ideal is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and Ideal Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideal Group 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 Ideal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideal Group SA has no effect on the direction of Motor Oil i.e., Motor Oil and Ideal Group go up and down completely randomly.
Pair Corralation between Motor Oil and Ideal Group
Assuming the 90 days trading horizon Motor Oil is expected to generate 3.72 times less return on investment than Ideal Group. In addition to that, Motor Oil is 1.1 times more volatile than Ideal Group SA. It trades about 0.02 of its total potential returns per unit of risk. Ideal Group SA is currently generating about 0.08 per unit of volatility. If you would invest 336.00 in Ideal Group SA on September 1, 2024 and sell it today you would earn a total of 249.00 from holding Ideal Group SA or generate 74.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Motor Oil Corinth vs. Ideal Group SA
Performance |
| Timeline |
| Motor Oil Corinth |
| Ideal Group SA |
Motor Oil and Ideal Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motor Oil and Ideal Group
The main advantage of trading using opposite Motor Oil and Ideal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motor Oil position performs unexpectedly, Ideal Group 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 Ideal Group will offset losses from the drop in Ideal Group'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 |
| Ideal Group vs. Hellenic Telecommunications Organization | Ideal Group vs. Terna Energy Societe | Ideal Group vs. Motor Oil Corinth | Ideal Group vs. Public Power |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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