Correlation Between Oil Natural and PTC INDUSTRIES
Can any of the company-specific risk be diversified away by investing in both Oil Natural and PTC INDUSTRIES 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 Oil Natural and PTC INDUSTRIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Natural Gas and PTC INDUSTRIES LTD, you can compare the effects of market volatilities on Oil Natural and PTC INDUSTRIES 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 Oil Natural with a short position of PTC INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Natural and PTC INDUSTRIES.
Diversification Opportunities for Oil Natural and PTC INDUSTRIES
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oil and PTC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oil Natural Gas and PTC INDUSTRIES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC INDUSTRIES LTD and Oil Natural 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 Oil Natural Gas are associated (or correlated) with PTC INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC INDUSTRIES LTD has no effect on the direction of Oil Natural i.e., Oil Natural and PTC INDUSTRIES go up and down completely randomly.
Pair Corralation between Oil Natural and PTC INDUSTRIES
Assuming the 90 days trading horizon Oil Natural is expected to generate 4.06 times less return on investment than PTC INDUSTRIES. But when comparing it to its historical volatility, Oil Natural Gas is 1.1 times less risky than PTC INDUSTRIES. It trades about 0.02 of its potential returns per unit of risk. PTC INDUSTRIES LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,173,290 in PTC INDUSTRIES LTD on August 28, 2024 and sell it today you would earn a total of 25,975 from holding PTC INDUSTRIES LTD or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Natural Gas vs. PTC INDUSTRIES LTD
Performance |
| Timeline |
| Oil Natural Gas |
| PTC INDUSTRIES LTD |
Oil Natural and PTC INDUSTRIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Natural and PTC INDUSTRIES
The main advantage of trading using opposite Oil Natural and PTC INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Natural position performs unexpectedly, PTC INDUSTRIES 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 PTC INDUSTRIES will offset losses from the drop in PTC INDUSTRIES's long position.| Oil Natural vs. TECIL Chemicals and | Oil Natural vs. Krebs Biochemicals and | Oil Natural vs. Manaksia Coated Metals | Oil Natural vs. Hilton Metal Forging |
| PTC INDUSTRIES vs. Embassy Office Parks | PTC INDUSTRIES vs. NRB Industrial Bearings | PTC INDUSTRIES vs. Global Health Limited | PTC INDUSTRIES vs. Lakshmi Finance Industrial |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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