Correlation Between Motor Oil and Public Power
Can any of the company-specific risk be diversified away by investing in both Motor Oil and Public Power 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 Public Power 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 Public Power, you can compare the effects of market volatilities on Motor Oil and Public Power 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 Public Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motor Oil and Public Power.
Diversification Opportunities for Motor Oil and Public Power
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Motor and Public is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and Public Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Power 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 Public Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Power has no effect on the direction of Motor Oil i.e., Motor Oil and Public Power go up and down completely randomly.
Pair Corralation between Motor Oil and Public Power
Assuming the 90 days trading horizon Motor Oil Corinth is expected to under-perform the Public Power. But the stock apears to be less risky and, when comparing its historical volatility, Motor Oil Corinth is 1.28 times less risky than Public Power. The stock trades about -0.22 of its potential returns per unit of risk. The Public Power is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,170 in Public Power on August 24, 2024 and sell it today you would lose (5.00) from holding Public Power or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Motor Oil Corinth vs. Public Power
Performance |
| Timeline |
| Motor Oil Corinth |
| Public Power |
Motor Oil and Public Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motor Oil and Public Power
The main advantage of trading using opposite Motor Oil and Public Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motor Oil position performs unexpectedly, Public Power 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 Public Power will offset losses from the drop in Public Power'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 |
| Public Power vs. Terna Energy Societe | Public Power vs. National Bank of | Public Power vs. EL D Mouzakis | Public Power vs. Lampsa Hellenic Hotels |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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