Correlation Between Nasdaq and Sakol Energy
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Sakol Energy 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 Nasdaq and Sakol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Sakol Energy Public, you can compare the effects of market volatilities on Nasdaq and Sakol Energy 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 Nasdaq with a short position of Sakol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Sakol Energy.
Diversification Opportunities for Nasdaq and Sakol Energy
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and Sakol is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Sakol Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sakol Energy Public and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Sakol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sakol Energy Public has no effect on the direction of Nasdaq i.e., Nasdaq and Sakol Energy go up and down completely randomly.
Pair Corralation between Nasdaq and Sakol Energy
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.36 times more return on investment than Sakol Energy. However, Nasdaq Inc is 2.77 times less risky than Sakol Energy. It trades about -0.17 of its potential returns per unit of risk. Sakol Energy Public is currently generating about -0.1 per unit of risk. If you would invest 8,064 in Nasdaq Inc on September 22, 2024 and sell it today you would lose (294.00) from holding Nasdaq Inc or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Sakol Energy Public
Performance |
| Timeline |
| Nasdaq Inc |
| Sakol Energy Public |
Nasdaq and Sakol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Sakol Energy
The main advantage of trading using opposite Nasdaq and Sakol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Sakol Energy 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 Sakol Energy will offset losses from the drop in Sakol Energy's long position.The idea behind Nasdaq Inc and Sakol Energy Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sakol Energy vs. Siamgas and Petrochemicals | Sakol Energy vs. Star Petroleum Refining | Sakol Energy vs. PTG Energy PCL | Sakol Energy vs. IRPC Public |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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