Correlation Between Tethys Oil and Wise Group
Can any of the company-specific risk be diversified away by investing in both Tethys Oil and Wise Group 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 Tethys Oil and Wise Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tethys Oil AB and Wise Group AB, you can compare the effects of market volatilities on Tethys Oil and Wise Group 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 Tethys Oil with a short position of Wise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tethys Oil and Wise Group.
Diversification Opportunities for Tethys Oil and Wise Group
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tethys and Wise is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tethys Oil AB and Wise Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wise Group AB and Tethys 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 Tethys Oil AB are associated (or correlated) with Wise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wise Group AB has no effect on the direction of Tethys Oil i.e., Tethys Oil and Wise Group go up and down completely randomly.
Pair Corralation between Tethys Oil and Wise Group
Assuming the 90 days trading horizon Tethys Oil AB is expected to generate 0.24 times more return on investment than Wise Group. However, Tethys Oil AB is 4.24 times less risky than Wise Group. It trades about 0.07 of its potential returns per unit of risk. Wise Group AB is currently generating about -0.18 per unit of risk. If you would invest 5,680 in Tethys Oil AB on September 3, 2024 and sell it today you would earn a total of 60.00 from holding Tethys Oil AB or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tethys Oil AB vs. Wise Group AB
Performance |
| Timeline |
| Tethys Oil AB |
| Wise Group AB |
Tethys Oil and Wise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tethys Oil and Wise Group
The main advantage of trading using opposite Tethys Oil and Wise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tethys Oil position performs unexpectedly, Wise Group 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 Wise Group will offset losses from the drop in Wise Group's long position.| Tethys Oil vs. Africa Oil Corp | Tethys Oil vs. International Petroleum | Tethys Oil vs. Maha Energy AB | Tethys Oil vs. Nobia AB |
| Wise Group vs. Rottneros AB | Wise Group vs. Dedicare AB | Wise Group vs. XANO Industri AB | Wise Group vs. Svedbergs i Dalstorp |
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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