Correlation Between Vista Oil and FibraHotel
Can any of the company-specific risk be diversified away by investing in both Vista Oil and FibraHotel 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 FibraHotel 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 FibraHotel, you can compare the effects of market volatilities on Vista Oil and FibraHotel 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 FibraHotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Oil and FibraHotel.
Diversification Opportunities for Vista Oil and FibraHotel
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vista and FibraHotel is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vista Oil Gas and FibraHotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibraHotel 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 FibraHotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibraHotel has no effect on the direction of Vista Oil i.e., Vista Oil and FibraHotel go up and down completely randomly.
Pair Corralation between Vista Oil and FibraHotel
Assuming the 90 days trading horizon Vista Oil is expected to generate 20.76 times less return on investment than FibraHotel. But when comparing it to its historical volatility, Vista Oil Gas is 2.47 times less risky than FibraHotel. It trades about 0.02 of its potential returns per unit of risk. FibraHotel is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 900.00 in FibraHotel on October 10, 2024 and sell it today you would earn a total of 135.00 from holding FibraHotel or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Oil Gas vs. FibraHotel
Performance |
| Timeline |
| Vista Oil Gas |
| FibraHotel |
Vista Oil and FibraHotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Oil and FibraHotel
The main advantage of trading using opposite Vista Oil and FibraHotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Oil position performs unexpectedly, FibraHotel 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 FibraHotel will offset losses from the drop in FibraHotel's long position.| Vista Oil vs. Applied Materials | Vista Oil vs. Hoteles City Express | Vista Oil vs. Delta Air Lines | Vista Oil vs. Capital One Financial |
| FibraHotel vs. Verizon Communications | FibraHotel vs. McEwen Mining | FibraHotel vs. Hoteles City Express | FibraHotel vs. KB Home |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Global Correlations Find global opportunities by holding instruments from different markets |