Correlation Between Short Oil and Johcm International
Can any of the company-specific risk be diversified away by investing in both Short Oil and Johcm International 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 Short Oil and Johcm International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Oil Gas and Johcm International Select, you can compare the effects of market volatilities on Short Oil and Johcm International 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 Short Oil with a short position of Johcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Oil and Johcm International.
Diversification Opportunities for Short Oil and Johcm International
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Short and Johcm is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas and Johcm International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm International and Short Oil 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 Short Oil Gas are associated (or correlated) with Johcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm International has no effect on the direction of Short Oil i.e., Short Oil and Johcm International go up and down completely randomly.
Pair Corralation between Short Oil and Johcm International
Assuming the 90 days horizon Short Oil Gas is expected to under-perform the Johcm International. In addition to that, Short Oil is 1.73 times more volatile than Johcm International Select. It trades about -0.14 of its total potential returns per unit of risk. Johcm International Select is currently generating about -0.2 per unit of volatility. If you would invest 2,517 in Johcm International Select on August 30, 2024 and sell it today you would lose (145.00) from holding Johcm International Select or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Oil Gas vs. Johcm International Select
Performance |
| Timeline |
| Short Oil Gas |
| Johcm International |
Short Oil and Johcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Oil and Johcm International
The main advantage of trading using opposite Short Oil and Johcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Oil position performs unexpectedly, Johcm International 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 Johcm International will offset losses from the drop in Johcm International's long position.| Short Oil vs. Short Precious Metals | Short Oil vs. McDonalds | Short Oil vs. Microsoft | Short Oil vs. Verizon Communications |
| Johcm International vs. Small Pany Growth | Johcm International vs. Ab Small Cap | Johcm International vs. Chartwell Small Cap | Johcm International vs. The Hartford Small |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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