Correlation Between Inpex Corp and Fidelity Sai

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

By analyzing existing cross correlation between Inpex Corp ADR and Fidelity Sai International, you can compare the effects of market volatilities on Inpex Corp and Fidelity Sai 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 Inpex Corp with a short position of Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inpex Corp and Fidelity Sai.

Diversification Opportunities for Inpex Corp and Fidelity Sai

0.61

Correlation Coefficient

Inpex Corp  Fidelity Sai

Poor diversification

The 3 months correlation between Inpex and Fidelity is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Inpex Corp ADR and Fidelity Sai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Interna and Inpex Corp 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 Inpex Corp ADR are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Interna has no effect on the direction of Inpex Corp i.e., Inpex Corp and Fidelity Sai go up and down completely randomly.

Pair Corralation between Inpex Corp and Fidelity Sai

Assuming the 90 days horizon Inpex Corp ADR is expected to generate 2.04 times more return on investment than Fidelity Sai. However, Inpex Corp is 2.04 times more volatile than Fidelity Sai International. It trades about -0.01 of its potential returns per unit of risk. Fidelity Sai International is currently generating about -0.04 per unit of risk. If you would invest  1,321  in Inpex Corp ADR on September 12, 2024 and sell it today you would lose (20.00) from holding Inpex Corp ADR or give up 1.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Inpex Corp ADR  vs.  Fidelity Sai International

Inpex Corp ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inpex Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Inpex Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Sai Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Sai International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Sai is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inpex Corp and Fidelity Sai

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

The idea behind Inpex Corp ADR and Fidelity Sai International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.