Correlation Between Plains GP and Innerscope Advertising
Can any of the company-specific risk be diversified away by investing in both Plains GP and Innerscope Advertising 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 Plains GP and Innerscope Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plains GP Holdings and Innerscope Advertising Agency, you can compare the effects of market volatilities on Plains GP and Innerscope Advertising 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 Plains GP with a short position of Innerscope Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plains GP and Innerscope Advertising.
Diversification Opportunities for Plains GP and Innerscope Advertising
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Plains and Innerscope is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Plains GP Holdings and Innerscope Advertising Agency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innerscope Advertising and Plains GP 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 Plains GP Holdings are associated (or correlated) with Innerscope Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innerscope Advertising has no effect on the direction of Plains GP i.e., Plains GP and Innerscope Advertising go up and down completely randomly.
Pair Corralation between Plains GP and Innerscope Advertising
Given the investment horizon of 90 days Plains GP Holdings is expected to generate 0.14 times more return on investment than Innerscope Advertising. However, Plains GP Holdings is 7.31 times less risky than Innerscope Advertising. It trades about 0.49 of its potential returns per unit of risk. Innerscope Advertising Agency is currently generating about -0.09 per unit of risk. If you would invest 1,820 in Plains GP Holdings on October 21, 2024 and sell it today you would earn a total of 323.00 from holding Plains GP Holdings or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Plains GP Holdings vs. Innerscope Advertising Agency
Performance |
| Timeline |
| Plains GP Holdings |
| Innerscope Advertising |
Plains GP and Innerscope Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plains GP and Innerscope Advertising
The main advantage of trading using opposite Plains GP and Innerscope Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plains GP position performs unexpectedly, Innerscope Advertising 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 Innerscope Advertising will offset losses from the drop in Innerscope Advertising's long position.| Plains GP vs. Targa Resources | Plains GP vs. Western Midstream Partners | Plains GP vs. MPLX LP | Plains GP vs. Plains All American |
| Innerscope Advertising vs. BioLife Sciences | Innerscope Advertising vs. CeCors Inc | Innerscope Advertising vs. GlucoTrack | Innerscope Advertising vs. Sharps Technology |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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