Correlation Between Realfiction Holding and Tethys Oil
Can any of the company-specific risk be diversified away by investing in both Realfiction Holding and Tethys 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 Realfiction Holding and Tethys Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realfiction Holding AB and Tethys Oil AB, you can compare the effects of market volatilities on Realfiction Holding and Tethys 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 Realfiction Holding with a short position of Tethys Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realfiction Holding and Tethys Oil.
Diversification Opportunities for Realfiction Holding and Tethys Oil
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Realfiction and Tethys is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Realfiction Holding AB and Tethys Oil AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tethys Oil AB and Realfiction Holding 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 Realfiction Holding AB are associated (or correlated) with Tethys Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tethys Oil AB has no effect on the direction of Realfiction Holding i.e., Realfiction Holding and Tethys Oil go up and down completely randomly.
Pair Corralation between Realfiction Holding and Tethys Oil
Assuming the 90 days trading horizon Realfiction Holding AB is expected to under-perform the Tethys Oil. In addition to that, Realfiction Holding is 7.98 times more volatile than Tethys Oil AB. It trades about -0.02 of its total potential returns per unit of risk. Tethys Oil AB is currently generating about -0.03 per unit of volatility. If you would invest 5,630 in Tethys Oil AB on August 30, 2024 and sell it today you would lose (20.00) from holding Tethys Oil AB or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Realfiction Holding AB vs. Tethys Oil AB
Performance |
| Timeline |
| Realfiction Holding |
| Tethys Oil AB |
Realfiction Holding and Tethys Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realfiction Holding and Tethys Oil
The main advantage of trading using opposite Realfiction Holding and Tethys Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realfiction Holding position performs unexpectedly, Tethys 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 Tethys Oil will offset losses from the drop in Tethys Oil's long position.| Realfiction Holding vs. Lifco AB | Realfiction Holding vs. Lagercrantz Group AB | Realfiction Holding vs. Addtech AB | Realfiction Holding vs. Instalco Intressenter AB |
| Tethys Oil vs. Africa Oil Corp | Tethys Oil vs. International Petroleum | Tethys Oil vs. Maha Energy AB | Tethys Oil vs. Nobia AB |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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