Correlation Between SIDETRADE and CNOOC

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

By analyzing existing cross correlation between SIDETRADE EO 1 and CNOOC, you can compare the effects of market volatilities on SIDETRADE and CNOOC 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 SIDETRADE with a short position of CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and CNOOC.

Diversification Opportunities for SIDETRADE and CNOOC

0.0

Correlation Coefficient

SIDETRADE  CNOOC

Pay attention - limited upside

The 3 months correlation between SIDETRADE and CNOOC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 and CNOOC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC and SIDETRADE 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 SIDETRADE EO 1 are associated (or correlated) with CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC has no effect on the direction of SIDETRADE i.e., SIDETRADE and CNOOC go up and down completely randomly.

Pair Corralation between SIDETRADE and CNOOC

If you would invest  22,100  in SIDETRADE EO 1 on December 22, 2024 and sell it today you would earn a total of  2,600  from holding SIDETRADE EO 1 or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

SIDETRADE EO 1  vs.  CNOOC

SIDETRADE EO 1

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SIDETRADE EO 1 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SIDETRADE reported solid returns over the last few months and may actually be approaching a breakup point.

CNOOC

Risk-Adjusted Performance

Very Weak

Over the last 90 days CNOOC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CNOOC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIDETRADE and CNOOC

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

The idea behind SIDETRADE EO 1 and CNOOC 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.