Correlation Between Neste Oyj and Motor Oil
Can any of the company-specific risk be diversified away by investing in both Neste Oyj and Motor 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 Neste Oyj and Motor Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and Motor Oil Hellas, you can compare the effects of market volatilities on Neste Oyj and Motor 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 Neste Oyj with a short position of Motor Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and Motor Oil.
Diversification Opportunities for Neste Oyj and Motor Oil
Weak diversification
The 3 months correlation between Neste and Motor is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj and Motor Oil Hellas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motor Oil Hellas 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 Motor Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motor Oil Hellas has no effect on the direction of Neste Oyj i.e., Neste Oyj and Motor Oil go up and down completely randomly.
Pair Corralation between Neste Oyj and Motor Oil
If you would invest 900.00 in Motor Oil Hellas on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Motor Oil Hellas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neste Oyj vs. Motor Oil Hellas
Performance |
| Timeline |
| Neste Oyj |
| Motor Oil Hellas |
Neste Oyj and Motor Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oyj and Motor Oil
The main advantage of trading using opposite Neste Oyj and Motor Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj position performs unexpectedly, Motor 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 Motor Oil will offset losses from the drop in Motor Oil'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 |
| Motor Oil vs. Neste Oyj | Motor Oil vs. Icahn Enterprises LP | Motor Oil vs. Neste Oyj | Motor Oil vs. Cosan SA ADR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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