Correlation Between Suntrust Home and Oriental Petroleum
Can any of the company-specific risk be diversified away by investing in both Suntrust Home and Oriental Petroleum 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 Suntrust Home and Oriental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntrust Home Developers and Oriental Petroleum and, you can compare the effects of market volatilities on Suntrust Home and Oriental Petroleum 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 Suntrust Home with a short position of Oriental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntrust Home and Oriental Petroleum.
Diversification Opportunities for Suntrust Home and Oriental Petroleum
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Suntrust and Oriental is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Suntrust Home Developers and Oriental Petroleum and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Petroleum and and Suntrust Home 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 Suntrust Home Developers are associated (or correlated) with Oriental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Petroleum and has no effect on the direction of Suntrust Home i.e., Suntrust Home and Oriental Petroleum go up and down completely randomly.
Pair Corralation between Suntrust Home and Oriental Petroleum
Assuming the 90 days trading horizon Suntrust Home Developers is expected to generate 1.01 times more return on investment than Oriental Petroleum. However, Suntrust Home is 1.01 times more volatile than Oriental Petroleum and. It trades about -0.03 of its potential returns per unit of risk. Oriental Petroleum and is currently generating about -0.35 per unit of risk. If you would invest 88.00 in Suntrust Home Developers on September 13, 2024 and sell it today you would lose (2.00) from holding Suntrust Home Developers or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.67% |
| Values | Daily Returns |
Suntrust Home Developers vs. Oriental Petroleum and
Performance |
| Timeline |
| Suntrust Home Developers |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Oriental Petroleum and |
Suntrust Home and Oriental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntrust Home and Oriental Petroleum
The main advantage of trading using opposite Suntrust Home and Oriental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntrust Home position performs unexpectedly, Oriental Petroleum 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 Oriental Petroleum will offset losses from the drop in Oriental Petroleum's long position.| Suntrust Home vs. ATN Holdings | Suntrust Home vs. GT Capital Holdings | Suntrust Home vs. Allhome Corp | Suntrust Home vs. Jollibee Foods Corp |
| Oriental Petroleum vs. Asia United Bank | Oriental Petroleum vs. Apex Mining Co | Oriental Petroleum vs. Security Bank Corp | Oriental Petroleum vs. Concepcion Industrial Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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