Correlation Between Oakley Capital and Devon Energy
Can any of the company-specific risk be diversified away by investing in both Oakley Capital and Devon Energy 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 Oakley Capital and Devon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Devon Energy Corp, you can compare the effects of market volatilities on Oakley Capital and Devon Energy 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 Oakley Capital with a short position of Devon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Devon Energy.
Diversification Opportunities for Oakley Capital and Devon Energy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oakley and Devon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Devon Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Devon Energy Corp and Oakley Capital 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 Oakley Capital Investments are associated (or correlated) with Devon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Devon Energy Corp has no effect on the direction of Oakley Capital i.e., Oakley Capital and Devon Energy go up and down completely randomly.
Pair Corralation between Oakley Capital and Devon Energy
Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.55 times more return on investment than Devon Energy. However, Oakley Capital Investments is 1.82 times less risky than Devon Energy. It trades about 0.03 of its potential returns per unit of risk. Devon Energy Corp is currently generating about -0.02 per unit of risk. If you would invest 40,695 in Oakley Capital Investments on September 2, 2024 and sell it today you would earn a total of 7,355 from holding Oakley Capital Investments or generate 18.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Oakley Capital Investments vs. Devon Energy Corp
Performance |
| Timeline |
| Oakley Capital Inves |
| Devon Energy Corp |
Oakley Capital and Devon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Devon Energy
The main advantage of trading using opposite Oakley Capital and Devon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital position performs unexpectedly, Devon Energy 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 Devon Energy will offset losses from the drop in Devon Energy's long position.| Oakley Capital vs. Toyota Motor Corp | Oakley Capital vs. SoftBank Group Corp | Oakley Capital vs. OTP Bank Nyrt | Oakley Capital vs. Las Vegas Sands |
| Devon Energy vs. MediaZest plc | Devon Energy vs. JD Sports Fashion | Devon Energy vs. Hollywood Bowl Group | Devon Energy vs. Verizon Communications |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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