Correlation Between Orca Energy and Inpex Corp
Can any of the company-specific risk be diversified away by investing in both Orca Energy and Inpex Corp 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 Orca Energy and Inpex Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orca Energy Group and Inpex Corp ADR, you can compare the effects of market volatilities on Orca Energy and Inpex Corp 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 Orca Energy with a short position of Inpex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orca Energy and Inpex Corp.
Diversification Opportunities for Orca Energy and Inpex Corp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orca and Inpex is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Orca Energy Group and Inpex Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpex Corp ADR and Orca Energy 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 Orca Energy Group are associated (or correlated) with Inpex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpex Corp ADR has no effect on the direction of Orca Energy i.e., Orca Energy and Inpex Corp go up and down completely randomly.
Pair Corralation between Orca Energy and Inpex Corp
Assuming the 90 days horizon Orca Energy Group is expected to under-perform the Inpex Corp. In addition to that, Orca Energy is 2.01 times more volatile than Inpex Corp ADR. It trades about -0.03 of its total potential returns per unit of risk. Inpex Corp ADR is currently generating about -0.05 per unit of volatility. If you would invest 1,620 in Inpex Corp ADR on September 3, 2024 and sell it today you would lose (310.00) from holding Inpex Corp ADR or give up 19.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.16% |
| Values | Daily Returns |
Orca Energy Group vs. Inpex Corp ADR
Performance |
| Timeline |
| Orca Energy Group |
| Inpex Corp ADR |
Orca Energy and Inpex Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orca Energy and Inpex Corp
The main advantage of trading using opposite Orca Energy and Inpex Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orca Energy position performs unexpectedly, Inpex Corp 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 Inpex Corp will offset losses from the drop in Inpex Corp's long position.| Orca Energy vs. PetroShale | Orca Energy vs. Questerre Energy | Orca Energy vs. Petrus Resources | Orca Energy vs. Inpex Corp ADR |
| Inpex Corp vs. San Leon Energy | Inpex Corp vs. Enwell Energy plc | Inpex Corp vs. Dno ASA | Inpex Corp vs. Questerre Energy |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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