Correlation Between ONEOK and Symphony Environmental

Can any of the company-specific risk be diversified away by investing in both ONEOK and Symphony Environmental 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 ONEOK and Symphony Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ONEOK Inc and Symphony Environmental Technologies, you can compare the effects of market volatilities on ONEOK and Symphony Environmental 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 ONEOK with a short position of Symphony Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Symphony Environmental.

Diversification Opportunities for ONEOK and Symphony Environmental

-0.05

Correlation Coefficient

ONEOK  Symphony Environmental

Good diversification

The 3 months correlation between ONEOK and Symphony is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental and ONEOK 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 ONEOK Inc are associated (or correlated) with Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of ONEOK i.e., ONEOK and Symphony Environmental go up and down completely randomly.

Pair Corralation between ONEOK and Symphony Environmental

Assuming the 90 days trading horizon ONEOK Inc is expected to generate 0.82 times more return on investment than Symphony Environmental. However, ONEOK Inc is 1.22 times less risky than Symphony Environmental. It trades about 0.07 of its potential returns per unit of risk. Symphony Environmental Technologies is currently generating about -0.14 per unit of risk. If you would invest  9,416  in ONEOK Inc on October 4, 2024 and sell it today you would earn a total of  685.00  from holding ONEOK Inc or generate 7.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

ONEOK Inc  vs.  Symphony Environmental Technol

ONEOK Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ONEOK Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ONEOK may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Symphony Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ONEOK and Symphony Environmental

The main advantage of trading using opposite ONEOK and Symphony Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Symphony Environmental 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 Symphony Environmental will offset losses from the drop in Symphony Environmental's long position.

The idea behind ONEOK Inc and Symphony Environmental Technologies 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.