Correlation Between Motor Oil and CNL Capital

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

By analyzing existing cross correlation between Motor Oil Corinth and CNL Capital EKES AIFM, you can compare the effects of market volatilities on Motor Oil and CNL Capital 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 Motor Oil with a short position of CNL Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motor Oil and CNL Capital.

Diversification Opportunities for Motor Oil and CNL Capital

-0.28

Correlation Coefficient

Motor Oil  CNL Capital

Very good diversification

The 3 months correlation between Motor and CNL is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and CNL Capital EKES AIFM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNL Capital EKES and Motor Oil 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 Motor Oil Corinth are associated (or correlated) with CNL Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNL Capital EKES has no effect on the direction of Motor Oil i.e., Motor Oil and CNL Capital go up and down completely randomly.

Pair Corralation between Motor Oil and CNL Capital

Assuming the 90 days trading horizon Motor Oil is expected to generate 10.92 times less return on investment than CNL Capital. But when comparing it to its historical volatility, Motor Oil Corinth is 1.47 times less risky than CNL Capital. It trades about 0.03 of its potential returns per unit of risk. CNL Capital EKES AIFM is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  695.00  in CNL Capital EKES AIFM on September 2, 2024 and sell it today you would earn a total of  50.00  from holding CNL Capital EKES AIFM or generate 7.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Motor Oil Corinth  vs.  CNL Capital EKES AIFM

Motor Oil Corinth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Motor Oil Corinth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CNL Capital EKES

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CNL Capital EKES AIFM are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, CNL Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Motor Oil and CNL Capital

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

The idea behind Motor Oil Corinth and CNL Capital EKES AIFM 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.