Correlation Between Oriental Petroleum and Asia United
Can any of the company-specific risk be diversified away by investing in both Oriental Petroleum and Asia United 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 Oriental Petroleum and Asia United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Petroleum and and Asia United Bank, you can compare the effects of market volatilities on Oriental Petroleum and Asia United 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 Oriental Petroleum with a short position of Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Petroleum and Asia United.
Diversification Opportunities for Oriental Petroleum and Asia United
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oriental and Asia is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Petroleum and and Asia United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia United Bank and Oriental 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 Oriental Petroleum and are associated (or correlated) with Asia United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia United Bank has no effect on the direction of Oriental Petroleum i.e., Oriental Petroleum and Asia United go up and down completely randomly.
Pair Corralation between Oriental Petroleum and Asia United
Assuming the 90 days trading horizon Oriental Petroleum and is expected to under-perform the Asia United. In addition to that, Oriental Petroleum is 2.66 times more volatile than Asia United Bank. It trades about -0.03 of its total potential returns per unit of risk. Asia United Bank is currently generating about 0.13 per unit of volatility. If you would invest 2,487 in Asia United Bank on September 13, 2024 and sell it today you would earn a total of 3,763 from holding Asia United Bank or generate 151.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 34.59% |
| Values | Daily Returns |
Oriental Petroleum and vs. Asia United Bank
Performance |
| Timeline |
| Oriental Petroleum and |
| Asia United Bank |
Oriental Petroleum and Asia United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Petroleum and Asia United
The main advantage of trading using opposite Oriental Petroleum and Asia United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Petroleum position performs unexpectedly, Asia United 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 Asia United will offset losses from the drop in Asia United's long position.| Oriental Petroleum vs. Asia United Bank | Oriental Petroleum vs. Apex Mining Co | Oriental Petroleum vs. Security Bank Corp | Oriental Petroleum vs. Concepcion Industrial Corp |
| Asia United vs. National Reinsurance | Asia United vs. Prime Media Holdings | Asia United vs. Crown Asia Chemicals | Asia United vs. Pacificonline Systems |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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