Correlation Between National Reinsurance and Oriental Petroleum
Can any of the company-specific risk be diversified away by investing in both National Reinsurance and Oriental 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 National Reinsurance and Oriental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and Oriental Petroleum and, you can compare the effects of market volatilities on National Reinsurance and Oriental 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 National Reinsurance with a short position of Oriental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Oriental Petroleum.
Diversification Opportunities for National Reinsurance and Oriental Petroleum
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Oriental is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Oriental Petroleum and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Petroleum and and National Reinsurance 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 National Reinsurance are associated (or correlated) with Oriental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Petroleum and has no effect on the direction of National Reinsurance i.e., National Reinsurance and Oriental Petroleum go up and down completely randomly.
Pair Corralation between National Reinsurance and Oriental Petroleum
Assuming the 90 days trading horizon National Reinsurance is expected to generate 1.79 times more return on investment than Oriental Petroleum. However, National Reinsurance is 1.79 times more volatile than Oriental Petroleum and. It trades about -0.04 of its potential returns per unit of risk. Oriental Petroleum and is currently generating about -0.35 per unit of risk. If you would invest 76.00 in National Reinsurance on September 13, 2024 and sell it today you would lose (8.00) from holding National Reinsurance or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
National Reinsurance vs. Oriental Petroleum and
Performance |
| Timeline |
| National Reinsurance |
| Oriental Petroleum and |
National Reinsurance and Oriental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and Oriental Petroleum
The main advantage of trading using opposite National Reinsurance and Oriental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance position performs unexpectedly, Oriental 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 Oriental Petroleum will offset losses from the drop in Oriental Petroleum's long position.| National Reinsurance vs. Atlas Consolidated Mining | National Reinsurance vs. House of Investments | National Reinsurance vs. Philippine Savings Bank | National Reinsurance vs. Premiere Entertainment |
| Oriental Petroleum vs. Asia United Bank | Oriental Petroleum vs. Apex Mining Co | Oriental Petroleum vs. Security Bank Corp | Oriental Petroleum vs. Concepcion Industrial Corp |
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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