Correlation Between Southern Petrochemicals and Oil Natural
Can any of the company-specific risk be diversified away by investing in both Southern Petrochemicals and Oil Natural 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 Southern Petrochemicals and Oil Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Petrochemicals Industries and Oil Natural Gas, you can compare the effects of market volatilities on Southern Petrochemicals and Oil Natural 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 Southern Petrochemicals with a short position of Oil Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Petrochemicals and Oil Natural.
Diversification Opportunities for Southern Petrochemicals and Oil Natural
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Southern and Oil is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Southern Petrochemicals Indust and Oil Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Natural Gas and Southern Petrochemicals 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 Southern Petrochemicals Industries are associated (or correlated) with Oil Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Natural Gas has no effect on the direction of Southern Petrochemicals i.e., Southern Petrochemicals and Oil Natural go up and down completely randomly.
Pair Corralation between Southern Petrochemicals and Oil Natural
Assuming the 90 days trading horizon Southern Petrochemicals Industries is expected to generate 1.32 times more return on investment than Oil Natural. However, Southern Petrochemicals is 1.32 times more volatile than Oil Natural Gas. It trades about 0.13 of its potential returns per unit of risk. Oil Natural Gas is currently generating about 0.09 per unit of risk. If you would invest 7,206 in Southern Petrochemicals Industries on November 5, 2024 and sell it today you would earn a total of 471.00 from holding Southern Petrochemicals Industries or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Petrochemicals Indust vs. Oil Natural Gas
Performance |
| Timeline |
| Southern Petrochemicals |
| Oil Natural Gas |
Southern Petrochemicals and Oil Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Petrochemicals and Oil Natural
The main advantage of trading using opposite Southern Petrochemicals and Oil Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Petrochemicals position performs unexpectedly, Oil Natural 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 Oil Natural will offset losses from the drop in Oil Natural's long position.| Southern Petrochemicals vs. NMDC Limited | Southern Petrochemicals vs. Steel Authority of | Southern Petrochemicals vs. Embassy Office Parks | Southern Petrochemicals vs. Jai Balaji Industries |
| Oil Natural vs. Nalwa Sons Investments | Oil Natural vs. The Investment Trust | Oil Natural vs. HDFC Asset Management | Oil Natural vs. BF Investment Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| CEOs Directory Screen CEOs from public companies around the world |