Correlation Between Vista Oil and Solution Financial
Can any of the company-specific risk be diversified away by investing in both Vista Oil and Solution Financial 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 Vista Oil and Solution Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Oil Gas and Solution Financial, you can compare the effects of market volatilities on Vista Oil and Solution Financial 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 Vista Oil with a short position of Solution Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Oil and Solution Financial.
Diversification Opportunities for Vista Oil and Solution Financial
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vista and Solution is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vista Oil Gas and Solution Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Financial and Vista 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 Vista Oil Gas are associated (or correlated) with Solution Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Financial has no effect on the direction of Vista Oil i.e., Vista Oil and Solution Financial go up and down completely randomly.
Pair Corralation between Vista Oil and Solution Financial
Given the investment horizon of 90 days Vista Oil Gas is expected to generate 0.84 times more return on investment than Solution Financial. However, Vista Oil Gas is 1.2 times less risky than Solution Financial. It trades about 0.09 of its potential returns per unit of risk. Solution Financial is currently generating about 0.01 per unit of risk. If you would invest 1,736 in Vista Oil Gas on December 2, 2024 and sell it today you would earn a total of 3,342 from holding Vista Oil Gas or generate 192.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Vista Oil Gas vs. Solution Financial
Performance |
| Timeline |
| Vista Oil Gas |
| Solution Financial |
Vista Oil and Solution Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Oil and Solution Financial
The main advantage of trading using opposite Vista Oil and Solution Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Oil position performs unexpectedly, Solution Financial 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 Solution Financial will offset losses from the drop in Solution Financial's long position.| Vista Oil vs. Battalion Oil Corp | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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