Correlation Between Occidental Petroleum and ATLANTIC PETROLPF
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum and ATLANTIC PETROLPF 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 Occidental Petroleum and ATLANTIC PETROLPF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and ATLANTIC PETROLPF DK, you can compare the effects of market volatilities on Occidental Petroleum and ATLANTIC PETROLPF 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 Occidental Petroleum with a short position of ATLANTIC PETROLPF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and ATLANTIC PETROLPF.
Diversification Opportunities for Occidental Petroleum and ATLANTIC PETROLPF
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Occidental and ATLANTIC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum and ATLANTIC PETROLPF DK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATLANTIC PETROLPF and Occidental 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 Occidental Petroleum are associated (or correlated) with ATLANTIC PETROLPF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATLANTIC PETROLPF has no effect on the direction of Occidental Petroleum i.e., Occidental Petroleum and ATLANTIC PETROLPF go up and down completely randomly.
Pair Corralation between Occidental Petroleum and ATLANTIC PETROLPF
Assuming the 90 days horizon Occidental Petroleum is expected to generate 0.32 times more return on investment than ATLANTIC PETROLPF. However, Occidental Petroleum is 3.08 times less risky than ATLANTIC PETROLPF. It trades about 0.09 of its potential returns per unit of risk. ATLANTIC PETROLPF DK is currently generating about -0.22 per unit of risk. If you would invest 4,652 in Occidental Petroleum on September 4, 2024 and sell it today you would earn a total of 119.00 from holding Occidental Petroleum or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Occidental Petroleum vs. ATLANTIC PETROLPF DK
Performance |
| Timeline |
| Occidental Petroleum |
| ATLANTIC PETROLPF |
Occidental Petroleum and ATLANTIC PETROLPF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and ATLANTIC PETROLPF
The main advantage of trading using opposite Occidental Petroleum and ATLANTIC PETROLPF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum position performs unexpectedly, ATLANTIC PETROLPF 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 ATLANTIC PETROLPF will offset losses from the drop in ATLANTIC PETROLPF's long position.| Occidental Petroleum vs. Alibaba Group Holding | Occidental Petroleum vs. Occidental Petroleum | Occidental Petroleum vs. WOODSIDE ENE SPADR | Occidental Petroleum vs. Woodside Energy Group |
| ATLANTIC PETROLPF vs. Alibaba Group Holding | ATLANTIC PETROLPF vs. Occidental Petroleum | ATLANTIC PETROLPF vs. WOODSIDE ENE SPADR | ATLANTIC PETROLPF vs. Woodside Energy Group |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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