Correlation Between Tamar Petroleum and Lapidoth
Can any of the company-specific risk be diversified away by investing in both Tamar Petroleum and Lapidoth 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 Tamar Petroleum and Lapidoth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tamar Petroleum and Lapidoth, you can compare the effects of market volatilities on Tamar Petroleum and Lapidoth 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 Tamar Petroleum with a short position of Lapidoth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamar Petroleum and Lapidoth.
Diversification Opportunities for Tamar Petroleum and Lapidoth
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tamar and Lapidoth is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tamar Petroleum and Lapidoth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lapidoth and Tamar 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 Tamar Petroleum are associated (or correlated) with Lapidoth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lapidoth has no effect on the direction of Tamar Petroleum i.e., Tamar Petroleum and Lapidoth go up and down completely randomly.
Pair Corralation between Tamar Petroleum and Lapidoth
Assuming the 90 days trading horizon Tamar Petroleum is expected to generate 1.05 times more return on investment than Lapidoth. However, Tamar Petroleum is 1.05 times more volatile than Lapidoth. It trades about 0.11 of its potential returns per unit of risk. Lapidoth is currently generating about 0.01 per unit of risk. If you would invest 115,748 in Tamar Petroleum on August 28, 2024 and sell it today you would earn a total of 117,952 from holding Tamar Petroleum or generate 101.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tamar Petroleum vs. Lapidoth
Performance |
| Timeline |
| Tamar Petroleum |
| Lapidoth |
Tamar Petroleum and Lapidoth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamar Petroleum and Lapidoth
The main advantage of trading using opposite Tamar Petroleum and Lapidoth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamar Petroleum position performs unexpectedly, Lapidoth 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 Lapidoth will offset losses from the drop in Lapidoth's long position.| Tamar Petroleum vs. Atreyu Capital Markets | Tamar Petroleum vs. IBI Inv House | Tamar Petroleum vs. Delek Automotive Systems | Tamar Petroleum vs. Scope Metals Group |
| Lapidoth vs. Atreyu Capital Markets | Lapidoth vs. IBI Inv House | Lapidoth vs. Delek Automotive Systems | Lapidoth vs. Scope Metals Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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