Correlation Between Premium Income and International Petroleum
Can any of the company-specific risk be diversified away by investing in both Premium Income and International Petroleum 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 Premium Income and International Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Income and International Petroleum Corp, you can compare the effects of market volatilities on Premium Income and International Petroleum 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 Premium Income with a short position of International Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Income and International Petroleum.
Diversification Opportunities for Premium Income and International Petroleum
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Premium and International is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income and International Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Petroleum and Premium Income 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 Premium Income are associated (or correlated) with International Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Petroleum has no effect on the direction of Premium Income i.e., Premium Income and International Petroleum go up and down completely randomly.
Pair Corralation between Premium Income and International Petroleum
Assuming the 90 days trading horizon Premium Income is expected to generate 19.27 times more return on investment than International Petroleum. However, Premium Income is 19.27 times more volatile than International Petroleum Corp. It trades about 0.06 of its potential returns per unit of risk. International Petroleum Corp is currently generating about 0.02 per unit of risk. If you would invest 17.00 in Premium Income on August 30, 2024 and sell it today you would earn a total of 588.00 from holding Premium Income or generate 3458.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Income vs. International Petroleum Corp
Performance |
| Timeline |
| Premium Income |
| International Petroleum |
Premium Income and International Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Income and International Petroleum
The main advantage of trading using opposite Premium Income and International Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Income position performs unexpectedly, International Petroleum 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 International Petroleum will offset losses from the drop in International Petroleum's long position.| Premium Income vs. Sprott Physical Gold | Premium Income vs. Brompton Split Banc | Premium Income vs. TDb Split Corp | Premium Income vs. Prime Dividend Corp |
| International Petroleum vs. Canadian Natural Resources | International Petroleum vs. Suncor Energy | International Petroleum vs. iShares Canadian HYBrid | International Petroleum vs. Altagas Cum Red |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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