Correlation Between Stewart Information and China Oilfield
Can any of the company-specific risk be diversified away by investing in both Stewart Information and China Oilfield 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 Stewart Information and China Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stewart Information Services and China Oilfield Services, you can compare the effects of market volatilities on Stewart Information and China Oilfield 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 Stewart Information with a short position of China Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and China Oilfield.
Diversification Opportunities for Stewart Information and China Oilfield
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stewart and China is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and China Oilfield Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Oilfield Services and Stewart Information 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 Stewart Information Services are associated (or correlated) with China Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Oilfield Services has no effect on the direction of Stewart Information i.e., Stewart Information and China Oilfield go up and down completely randomly.
Pair Corralation between Stewart Information and China Oilfield
Assuming the 90 days horizon Stewart Information Services is expected to generate 0.53 times more return on investment than China Oilfield. However, Stewart Information Services is 1.9 times less risky than China Oilfield. It trades about 0.1 of its potential returns per unit of risk. China Oilfield Services is currently generating about 0.03 per unit of risk. If you would invest 3,531 in Stewart Information Services on August 29, 2024 and sell it today you would earn a total of 3,469 from holding Stewart Information Services or generate 98.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stewart Information Services vs. China Oilfield Services
Performance |
| Timeline |
| Stewart Information |
| China Oilfield Services |
Stewart Information and China Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Information and China Oilfield
The main advantage of trading using opposite Stewart Information and China Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart Information position performs unexpectedly, China Oilfield 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 China Oilfield will offset losses from the drop in China Oilfield's long position.| Stewart Information vs. Superior Plus Corp | Stewart Information vs. NMI Holdings | Stewart Information vs. Origin Agritech | Stewart Information vs. SIVERS SEMICONDUCTORS AB |
| China Oilfield vs. Japan Post Insurance | China Oilfield vs. Ameriprise Financial | China Oilfield vs. REVO INSURANCE SPA | China Oilfield vs. Singapore Reinsurance |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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