Correlation Between Star Petroleum and Sea Oil
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and Sea 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 Star Petroleum and Sea Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Petroleum Refining and Sea Oil Public, you can compare the effects of market volatilities on Star Petroleum and Sea 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 Star Petroleum with a short position of Sea Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and Sea Oil.
Diversification Opportunities for Star Petroleum and Sea Oil
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Star and Sea is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and Sea Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Oil Public and Star Petroleum 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 Star Petroleum Refining are associated (or correlated) with Sea Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Oil Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and Sea Oil go up and down completely randomly.
Pair Corralation between Star Petroleum and Sea Oil
Assuming the 90 days trading horizon Star Petroleum Refining is expected to under-perform the Sea Oil. In addition to that, Star Petroleum is 1.04 times more volatile than Sea Oil Public. It trades about -0.06 of its total potential returns per unit of risk. Sea Oil Public is currently generating about -0.02 per unit of volatility. If you would invest 335.00 in Sea Oil Public on November 5, 2024 and sell it today you would lose (79.00) from holding Sea Oil Public or give up 23.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Petroleum Refining vs. Sea Oil Public
Performance |
| Timeline |
| Star Petroleum Refining |
| Sea Oil Public |
Star Petroleum and Sea Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and Sea Oil
The main advantage of trading using opposite Star Petroleum and Sea Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, Sea 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 Sea Oil will offset losses from the drop in Sea Oil's long position.| Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration and |
| Sea Oil vs. Star Petroleum Refining | Sea Oil vs. Power Solution Technologies | Sea Oil vs. Kingsmen CMTI Public | Sea Oil vs. Project Planning Service |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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