Correlation Between Oasis Petroleum and Magnite
Can any of the company-specific risk be diversified away by investing in both Oasis Petroleum and Magnite 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 Oasis Petroleum and Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oasis Petroleum and Magnite, you can compare the effects of market volatilities on Oasis Petroleum and Magnite 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 Oasis Petroleum with a short position of Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oasis Petroleum and Magnite.
Diversification Opportunities for Oasis Petroleum and Magnite
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oasis and Magnite is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Oasis Petroleum and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and Oasis Petroleum 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 Oasis Petroleum are associated (or correlated) with Magnite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnite has no effect on the direction of Oasis Petroleum i.e., Oasis Petroleum and Magnite go up and down completely randomly.
Pair Corralation between Oasis Petroleum and Magnite
Assuming the 90 days horizon Oasis Petroleum is expected to generate 1.88 times less return on investment than Magnite. In addition to that, Oasis Petroleum is 1.05 times more volatile than Magnite. It trades about 0.18 of its total potential returns per unit of risk. Magnite is currently generating about 0.36 per unit of volatility. If you would invest 1,241 in Magnite on September 2, 2024 and sell it today you would earn a total of 438.00 from holding Magnite or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Oasis Petroleum vs. Magnite
Performance |
| Timeline |
| Oasis Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Magnite |
Oasis Petroleum and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oasis Petroleum and Magnite
The main advantage of trading using opposite Oasis Petroleum and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oasis Petroleum position performs unexpectedly, Magnite 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 Magnite will offset losses from the drop in Magnite's long position.| Oasis Petroleum vs. Magnite | Oasis Petroleum vs. WPP PLC ADR | Oasis Petroleum vs. European Wax Center | Oasis Petroleum vs. Mannatech Incorporated |
| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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