Correlation Between Stellar and Oasis Petroleum
Can any of the company-specific risk be diversified away by investing in both Stellar and Oasis Petroleum 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 Stellar and Oasis Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Oasis Petroleum, you can compare the effects of market volatilities on Stellar and Oasis Petroleum 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 Stellar with a short position of Oasis Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Oasis Petroleum.
Diversification Opportunities for Stellar and Oasis Petroleum
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stellar and Oasis is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Oasis Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis Petroleum and Stellar 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 Stellar are associated (or correlated) with Oasis Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis Petroleum has no effect on the direction of Stellar i.e., Stellar and Oasis Petroleum go up and down completely randomly.
Pair Corralation between Stellar and Oasis Petroleum
If you would invest 36.00 in Stellar on October 21, 2024 and sell it today you would earn a total of 13.00 from holding Stellar or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Stellar vs. Oasis Petroleum
Performance |
| Timeline |
| Stellar |
| Oasis Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Stellar and Oasis Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Oasis Petroleum
The main advantage of trading using opposite Stellar and Oasis Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Oasis Petroleum 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 Oasis Petroleum will offset losses from the drop in Oasis Petroleum's long position.The idea behind Stellar and Oasis Petroleum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Oasis Petroleum vs. Robix Environmental Technologies | Oasis Petroleum vs. ArcelorMittal SA ADR | Oasis Petroleum vs. Insteel Industries | Oasis Petroleum vs. Lizhan Environmental |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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