Correlation Between Antibiotice and Oil Terminal

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

By analyzing existing cross correlation between Antibiotice Ia and Oil Terminal C, you can compare the effects of market volatilities on Antibiotice and Oil Terminal 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 Antibiotice with a short position of Oil Terminal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antibiotice and Oil Terminal.

Diversification Opportunities for Antibiotice and Oil Terminal

0.3

Correlation Coefficient

Antibiotice  Oil Terminal

Weak diversification

The 3 months correlation between Antibiotice and Oil is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Antibiotice Ia and Oil Terminal C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Terminal C and Antibiotice 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 Antibiotice Ia are associated (or correlated) with Oil Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Terminal C has no effect on the direction of Antibiotice i.e., Antibiotice and Oil Terminal go up and down completely randomly.

Pair Corralation between Antibiotice and Oil Terminal

Assuming the 90 days trading horizon Antibiotice Ia is expected to under-perform the Oil Terminal. In addition to that, Antibiotice is 1.41 times more volatile than Oil Terminal C. It trades about -0.04 of its total potential returns per unit of risk. Oil Terminal C is currently generating about 0.01 per unit of volatility. If you would invest  12.00  in Oil Terminal C on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Oil Terminal C or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Antibiotice Ia  vs.  Oil Terminal C

Antibiotice Ia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antibiotice Ia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Oil Terminal C

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oil Terminal C has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Oil Terminal is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Antibiotice and Oil Terminal

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

The idea behind Antibiotice Ia and Oil Terminal C 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.