Correlation Between Oil Gas and Ivy Advantus

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Can any of the company-specific risk be diversified away by investing in both Oil Gas and Ivy Advantus 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 Oil Gas and Ivy Advantus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Ivy Advantus Real, you can compare the effects of market volatilities on Oil Gas and Ivy Advantus 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 Oil Gas with a short position of Ivy Advantus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Ivy Advantus.

Diversification Opportunities for Oil Gas and Ivy Advantus

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Oil and Ivy is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Ivy Advantus Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Advantus Real and Oil Gas 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 Oil Gas Ultrasector are associated (or correlated) with Ivy Advantus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Advantus Real has no effect on the direction of Oil Gas i.e., Oil Gas and Ivy Advantus go up and down completely randomly.

Pair Corralation between Oil Gas and Ivy Advantus

Assuming the 90 days horizon Oil Gas Ultrasector is expected to under-perform the Ivy Advantus. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oil Gas Ultrasector is 1.68 times less risky than Ivy Advantus. The mutual fund trades about -0.5 of its potential returns per unit of risk. The Ivy Advantus Real is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest  1,809  in Ivy Advantus Real on October 4, 2024 and sell it today you would lose (282.00) from holding Ivy Advantus Real or give up 15.59% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Oil Gas Ultrasector  vs.  Ivy Advantus Real

 Performance 
       Timeline  
Oil Gas Ultrasector 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Oil Gas Ultrasector has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
Ivy Advantus Real 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ivy Advantus Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of unfluctuating performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Oil Gas and Ivy Advantus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oil Gas and Ivy Advantus

The main advantage of trading using opposite Oil Gas and Ivy Advantus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas position performs unexpectedly, Ivy Advantus 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 Ivy Advantus will offset losses from the drop in Ivy Advantus' long position.
The idea behind Oil Gas Ultrasector and Ivy Advantus Real 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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