Correlation Between Nordic American and Imperial Petroleum
Can any of the company-specific risk be diversified away by investing in both Nordic American and Imperial Petroleum 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 Nordic American and Imperial Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic American Tankers and Imperial Petroleum Preferred, you can compare the effects of market volatilities on Nordic American and Imperial Petroleum 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 Nordic American with a short position of Imperial Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic American and Imperial Petroleum.
Diversification Opportunities for Nordic American and Imperial Petroleum
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Imperial is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nordic American Tankers and Imperial Petroleum Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Petroleum and Nordic American 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 Nordic American Tankers are associated (or correlated) with Imperial Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Petroleum has no effect on the direction of Nordic American i.e., Nordic American and Imperial Petroleum go up and down completely randomly.
Pair Corralation between Nordic American and Imperial Petroleum
Considering the 90-day investment horizon Nordic American is expected to generate 2.97 times less return on investment than Imperial Petroleum. In addition to that, Nordic American is 1.88 times more volatile than Imperial Petroleum Preferred. It trades about 0.01 of its total potential returns per unit of risk. Imperial Petroleum Preferred is currently generating about 0.08 per unit of volatility. If you would invest 1,599 in Imperial Petroleum Preferred on August 24, 2024 and sell it today you would earn a total of 931.00 from holding Imperial Petroleum Preferred or generate 58.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nordic American Tankers vs. Imperial Petroleum Preferred
Performance |
| Timeline |
| Nordic American Tankers |
| Imperial Petroleum |
Nordic American and Imperial Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic American and Imperial Petroleum
The main advantage of trading using opposite Nordic American and Imperial Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic American position performs unexpectedly, Imperial Petroleum 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 Imperial Petroleum will offset losses from the drop in Imperial Petroleum's long position.| Nordic American vs. Oceanpal | Nordic American vs. Safe Bulkers | Nordic American vs. Safe Bulkers | Nordic American vs. Safe Bulkers |
| Imperial Petroleum vs. Imperial Petroleum | Imperial Petroleum vs. Dynagas LNG Partners | Imperial Petroleum vs. GasLog Partners LP | Imperial Petroleum vs. GasLog Partners LP |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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