Correlation Between Neste Oyj and Ampol
Can any of the company-specific risk be diversified away by investing in both Neste Oyj and Ampol 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 Neste Oyj and Ampol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and Ampol Ltd ADR, you can compare the effects of market volatilities on Neste Oyj and Ampol 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 Neste Oyj with a short position of Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and Ampol.
Diversification Opportunities for Neste Oyj and Ampol
Poor diversification
The 3 months correlation between Neste and Ampol is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj and Ampol Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol Ltd ADR and Neste Oyj 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 Neste Oyj are associated (or correlated) with Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol Ltd ADR has no effect on the direction of Neste Oyj i.e., Neste Oyj and Ampol go up and down completely randomly.
Pair Corralation between Neste Oyj and Ampol
Assuming the 90 days horizon Neste Oyj is expected to under-perform the Ampol. In addition to that, Neste Oyj is 1.61 times more volatile than Ampol Ltd ADR. It trades about -0.08 of its total potential returns per unit of risk. Ampol Ltd ADR is currently generating about 0.02 per unit of volatility. If you would invest 3,502 in Ampol Ltd ADR on September 3, 2024 and sell it today you would earn a total of 285.00 from holding Ampol Ltd ADR or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neste Oyj vs. Ampol Ltd ADR
Performance |
| Timeline |
| Neste Oyj |
| Ampol Ltd ADR |
Neste Oyj and Ampol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oyj and Ampol
The main advantage of trading using opposite Neste Oyj and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.| Neste Oyj vs. Icahn Enterprises LP | Neste Oyj vs. Star Gas Partners | Neste Oyj vs. Ultrapar Participacoes SA | Neste Oyj vs. Par Pacific Holdings |
| Ampol vs. Ultrapar Participacoes SA | Ampol vs. Sunoco LP | Ampol vs. HF Sinclair Corp | Ampol vs. Delek Energy |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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