Correlation Between Tullow Oil and Parafin Corp
Can any of the company-specific risk be diversified away by investing in both Tullow Oil and Parafin Corp 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 Tullow Oil and Parafin Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tullow Oil plc and Parafin Corp, you can compare the effects of market volatilities on Tullow Oil and Parafin Corp 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 Tullow Oil with a short position of Parafin Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tullow Oil and Parafin Corp.
Diversification Opportunities for Tullow Oil and Parafin Corp
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tullow and Parafin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tullow Oil plc and Parafin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parafin Corp and Tullow 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 Tullow Oil plc are associated (or correlated) with Parafin Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parafin Corp has no effect on the direction of Tullow Oil i.e., Tullow Oil and Parafin Corp go up and down completely randomly.
Pair Corralation between Tullow Oil and Parafin Corp
If you would invest 30.00 in Tullow Oil plc on September 1, 2024 and sell it today you would lose (1.00) from holding Tullow Oil plc or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Tullow Oil plc vs. Parafin Corp
Performance |
| Timeline |
| Tullow Oil plc |
| Parafin Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tullow Oil and Parafin Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tullow Oil and Parafin Corp
The main advantage of trading using opposite Tullow Oil and Parafin Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tullow Oil position performs unexpectedly, Parafin Corp 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 Parafin Corp will offset losses from the drop in Parafin Corp's long position.| Tullow Oil vs. Permian Resources | Tullow Oil vs. Devon Energy | Tullow Oil vs. EOG Resources | Tullow Oil vs. Coterra Energy |
| Parafin Corp vs. Imperial Res | Parafin Corp vs. Strat Petroleum | Parafin Corp vs. Century Petroleum 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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