Correlation Between Motor Oil and Gr Sarantis

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

Diversification Opportunities for Motor Oil and Gr Sarantis

0.34

Correlation Coefficient

Motor Oil  Gr Sarantis

Weak diversification

The 3 months correlation between Motor and SAR is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and Gr Sarantis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gr Sarantis SA 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 Gr Sarantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gr Sarantis SA has no effect on the direction of Motor Oil i.e., Motor Oil and Gr Sarantis go up and down completely randomly.

Pair Corralation between Motor Oil and Gr Sarantis

Assuming the 90 days trading horizon Motor Oil Corinth is expected to under-perform the Gr Sarantis. In addition to that, Motor Oil is 1.16 times more volatile than Gr Sarantis SA. It trades about -0.06 of its total potential returns per unit of risk. Gr Sarantis SA is currently generating about -0.01 per unit of volatility. If you would invest  1,092  in Gr Sarantis SA on September 12, 2024 and sell it today you would lose (12.00) from holding Gr Sarantis SA or give up 1.1% of portfolio value over 90 days.

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

Motor Oil Corinth  vs.  Gr Sarantis SA

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 comparatively stable technical indicators, Motor Oil is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Gr Sarantis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gr Sarantis SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gr Sarantis is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Motor Oil and Gr Sarantis

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

The idea behind Motor Oil Corinth and Gr Sarantis SA 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.