Correlation Between Nolato AB and Africa Oil
Can any of the company-specific risk be diversified away by investing in both Nolato AB and Africa Oil 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 Nolato AB and Africa Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nolato AB and Africa Oil Corp, you can compare the effects of market volatilities on Nolato AB and Africa Oil 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 Nolato AB with a short position of Africa Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nolato AB and Africa Oil.
Diversification Opportunities for Nolato AB and Africa Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nolato and Africa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nolato AB and Africa Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Oil Corp and Nolato AB 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 Nolato AB are associated (or correlated) with Africa Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Oil Corp has no effect on the direction of Nolato AB i.e., Nolato AB and Africa Oil go up and down completely randomly.
Pair Corralation between Nolato AB and Africa Oil
Assuming the 90 days trading horizon Nolato AB is expected to generate 1.02 times more return on investment than Africa Oil. However, Nolato AB is 1.02 times more volatile than Africa Oil Corp. It trades about 0.01 of its potential returns per unit of risk. Africa Oil Corp is currently generating about -0.01 per unit of risk. If you would invest 5,508 in Nolato AB on September 3, 2024 and sell it today you would lose (113.00) from holding Nolato AB or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nolato AB vs. Africa Oil Corp
Performance |
| Timeline |
| Nolato AB |
| Africa Oil Corp |
Nolato AB and Africa Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nolato AB and Africa Oil
The main advantage of trading using opposite Nolato AB and Africa Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nolato AB position performs unexpectedly, Africa Oil 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 Africa Oil will offset losses from the drop in Africa Oil's long position.| Nolato AB vs. HEXPOL AB | Nolato AB vs. Trelleborg AB | Nolato AB vs. Indutrade AB | Nolato AB vs. Vitrolife AB |
| Africa Oil vs. International Petroleum | Africa Oil vs. Africa Energy Corp | Africa Oil vs. Africa Oil Corp | Africa Oil vs. Lundin Mining |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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