Correlation Between Perma Pipe and Battalion Oil
Can any of the company-specific risk be diversified away by investing in both Perma Pipe and Battalion Oil 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 Perma Pipe and Battalion Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perma Pipe International Holdings and Battalion Oil Corp, you can compare the effects of market volatilities on Perma Pipe and Battalion Oil 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 Perma Pipe with a short position of Battalion Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perma Pipe and Battalion Oil.
Diversification Opportunities for Perma Pipe and Battalion Oil
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perma and Battalion is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Perma Pipe International Holdi and Battalion Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battalion Oil Corp and Perma Pipe 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 Perma Pipe International Holdings are associated (or correlated) with Battalion Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battalion Oil Corp has no effect on the direction of Perma Pipe i.e., Perma Pipe and Battalion Oil go up and down completely randomly.
Pair Corralation between Perma Pipe and Battalion Oil
Given the investment horizon of 90 days Perma Pipe International Holdings is expected to generate 0.28 times more return on investment than Battalion Oil. However, Perma Pipe International Holdings is 3.54 times less risky than Battalion Oil. It trades about 0.11 of its potential returns per unit of risk. Battalion Oil Corp is currently generating about 0.03 per unit of risk. If you would invest 1,025 in Perma Pipe International Holdings on November 2, 2024 and sell it today you would earn a total of 500.00 from holding Perma Pipe International Holdings or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perma Pipe International Holdi vs. Battalion Oil Corp
Performance |
| Timeline |
| Perma Pipe Internati |
| Battalion Oil Corp |
Perma Pipe and Battalion Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perma Pipe and Battalion Oil
The main advantage of trading using opposite Perma Pipe and Battalion Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perma Pipe position performs unexpectedly, Battalion Oil 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 Battalion Oil will offset losses from the drop in Battalion Oil's long position.| Perma Pipe vs. Gibraltar Industries | Perma Pipe vs. Quanex Building Products | Perma Pipe vs. Jeld Wen Holding | Perma Pipe vs. Interface |
| Battalion Oil vs. Epsilon Energy | Battalion Oil vs. Citizens Community Bancorp | Battalion Oil vs. Perma Pipe International Holdings | Battalion Oil vs. Amplify Energy Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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