Correlation Between Motor Oil and Marfin Investment
Can any of the company-specific risk be diversified away by investing in both Motor Oil and Marfin Investment 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 Marfin Investment 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 Marfin Investment Group, you can compare the effects of market volatilities on Motor Oil and Marfin Investment 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 Marfin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motor Oil and Marfin Investment.
Diversification Opportunities for Motor Oil and Marfin Investment
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Motor and Marfin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and Marfin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfin Investment 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 Marfin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfin Investment has no effect on the direction of Motor Oil i.e., Motor Oil and Marfin Investment go up and down completely randomly.
Pair Corralation between Motor Oil and Marfin Investment
Assuming the 90 days trading horizon Motor Oil Corinth is expected to generate 0.48 times more return on investment than Marfin Investment. However, Motor Oil Corinth is 2.07 times less risky than Marfin Investment. It trades about -0.08 of its potential returns per unit of risk. Marfin Investment Group is currently generating about -0.1 per unit of risk. If you would invest 2,018 in Motor Oil Corinth on August 30, 2024 and sell it today you would lose (55.00) from holding Motor Oil Corinth or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Motor Oil Corinth vs. Marfin Investment Group
Performance |
| Timeline |
| Motor Oil Corinth |
| Marfin Investment |
Motor Oil and Marfin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motor Oil and Marfin Investment
The main advantage of trading using opposite Motor Oil and Marfin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motor Oil position performs unexpectedly, Marfin Investment 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 Marfin Investment will offset losses from the drop in Marfin Investment'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 |
| Marfin Investment vs. National Bank of | Marfin Investment vs. EL D Mouzakis | Marfin Investment vs. Lampsa Hellenic Hotels | Marfin Investment vs. Eurobank Ergasias Services |
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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