Correlation Between Star Petroleum and Wp Energy
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and Wp Energy 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 Wp Energy 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 Wp Energy Public, you can compare the effects of market volatilities on Star Petroleum and Wp Energy 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 Wp Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and Wp Energy.
Diversification Opportunities for Star Petroleum and Wp Energy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Star and Wp Energy is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and Wp Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wp Energy 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 Wp Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wp Energy Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and Wp Energy go up and down completely randomly.
Pair Corralation between Star Petroleum and Wp Energy
Assuming the 90 days trading horizon Star Petroleum Refining is expected to under-perform the Wp Energy. But the stock apears to be less risky and, when comparing its historical volatility, Star Petroleum Refining is 31.06 times less risky than Wp Energy. The stock trades about -0.07 of its potential returns per unit of risk. The Wp Energy Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 408.00 in Wp Energy Public on December 4, 2024 and sell it today you would lose (88.00) from holding Wp Energy Public or give up 21.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.58% |
| Values | Daily Returns |
Star Petroleum Refining vs. Wp Energy Public
Performance |
| Timeline |
| Star Petroleum Refining |
| Wp Energy Public |
Star Petroleum and Wp Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and Wp Energy
The main advantage of trading using opposite Star Petroleum and Wp Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, Wp Energy 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 Wp Energy will offset losses from the drop in Wp Energy's long position.| Star Petroleum vs. Thai Oil Public | Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration and |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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