Correlation Between Eastern Silk and Oil Natural

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

By analyzing existing cross correlation between Eastern Silk Industries and Oil Natural Gas, you can compare the effects of market volatilities on Eastern Silk and Oil Natural 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 Eastern Silk with a short position of Oil Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Silk and Oil Natural.

Diversification Opportunities for Eastern Silk and Oil Natural

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Correlation Coefficient

Eastern Silk  Oil Natural

Pay attention - limited upside

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

Pair Corralation between Eastern Silk and Oil Natural

Assuming the 90 days trading horizon Eastern Silk Industries is expected to under-perform the Oil Natural. In addition to that, Eastern Silk is 1.16 times more volatile than Oil Natural Gas. It trades about -0.07 of its total potential returns per unit of risk. Oil Natural Gas is currently generating about 0.07 per unit of volatility. If you would invest  13,212  in Oil Natural Gas on September 20, 2024 and sell it today you would earn a total of  11,203  from holding Oil Natural Gas or generate 84.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	86.07%
Values	Daily Returns

Eastern Silk Industries  vs.  Oil Natural Gas

Eastern Silk Industries

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Eastern Silk Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Eastern Silk is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Oil Natural Gas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oil Natural Gas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Eastern Silk and Oil Natural

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

The idea behind Eastern Silk Industries and Oil Natural Gas 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 Stocks Directory module to find actively traded stocks across global markets.