Correlation Between Opal Balance and Petrochemical
Can any of the company-specific risk be diversified away by investing in both Opal Balance and Petrochemical 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 Opal Balance and Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opal Balance and Petrochemical, you can compare the effects of market volatilities on Opal Balance and Petrochemical 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 Opal Balance with a short position of Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opal Balance and Petrochemical.
Diversification Opportunities for Opal Balance and Petrochemical
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Opal and Petrochemical is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Opal Balance and Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrochemical and Opal Balance 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 Opal Balance are associated (or correlated) with Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrochemical has no effect on the direction of Opal Balance i.e., Opal Balance and Petrochemical go up and down completely randomly.
Pair Corralation between Opal Balance and Petrochemical
Assuming the 90 days trading horizon Opal Balance is expected to generate 0.86 times more return on investment than Petrochemical. However, Opal Balance is 1.16 times less risky than Petrochemical. It trades about 0.23 of its potential returns per unit of risk. Petrochemical is currently generating about -0.04 per unit of risk. If you would invest 18,089 in Opal Balance on September 1, 2024 and sell it today you would earn a total of 1,201 from holding Opal Balance or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Opal Balance vs. Petrochemical
Performance |
| Timeline |
| Opal Balance |
| Petrochemical |
Opal Balance and Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opal Balance and Petrochemical
The main advantage of trading using opposite Opal Balance and Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opal Balance position performs unexpectedly, Petrochemical 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 Petrochemical will offset losses from the drop in Petrochemical's long position.| Opal Balance vs. Nawi Brothers Group | Opal Balance vs. EN Shoham Business | Opal Balance vs. Peninsula Group | Opal Balance vs. Shikun Binui |
| Petrochemical vs. Brainsway | Petrochemical vs. Mivne Real Estate | Petrochemical vs. Photomyne | Petrochemical vs. Israel Land Development |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |