Correlation Between Motor Oil and GEK TERNA

Can any of the company-specific risk be diversified away by investing in both Motor Oil and GEK TERNA 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 GEK TERNA 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 GEK TERNA Holdings, you can compare the effects of market volatilities on Motor Oil and GEK TERNA 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 GEK TERNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motor Oil and GEK TERNA.

Diversification Opportunities for Motor Oil and GEK TERNA

0.75

Correlation Coefficient

Motor Oil  GEK TERNA

Poor diversification

The 3 months correlation between Motor and GEK is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and GEK TERNA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEK TERNA Holdings 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 GEK TERNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEK TERNA Holdings has no effect on the direction of Motor Oil i.e., Motor Oil and GEK TERNA go up and down completely randomly.

Pair Corralation between Motor Oil and GEK TERNA

Assuming the 90 days trading horizon Motor Oil Corinth is expected to generate 1.31 times more return on investment than GEK TERNA. However, Motor Oil is 1.31 times more volatile than GEK TERNA Holdings. It trades about 0.16 of its potential returns per unit of risk. GEK TERNA Holdings is currently generating about 0.13 per unit of risk. If you would invest  2,024  in Motor Oil Corinth on December 30, 2024 and sell it today you would earn a total of  264.00  from holding Motor Oil Corinth or generate 13.04% return on investment over 90 days.

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

Motor Oil Corinth  vs.  GEK TERNA Holdings

Motor Oil Corinth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Motor Oil Corinth are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical indicators, Motor Oil unveiled solid returns over the last few months and may actually be approaching a breakup point.

GEK TERNA Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GEK TERNA Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, GEK TERNA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Motor Oil and GEK TERNA

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

The idea behind Motor Oil Corinth and GEK TERNA Holdings 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.