Correlation Between Oil Terminal and Aages SA

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

By analyzing existing cross correlation between Oil Terminal C and Aages SA, you can compare the effects of market volatilities on Oil Terminal and Aages SA 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 Terminal with a short position of Aages SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Terminal and Aages SA.

Diversification Opportunities for Oil Terminal and Aages SA

-0.38

Correlation Coefficient

Oil Terminal  Aages SA

Very good diversification

The 3 months correlation between Oil and Aages is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Oil Terminal C and Aages SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aages SA and Oil Terminal 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 Terminal C are associated (or correlated) with Aages SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aages SA has no effect on the direction of Oil Terminal i.e., Oil Terminal and Aages SA go up and down completely randomly.

Pair Corralation between Oil Terminal and Aages SA

Assuming the 90 days trading horizon Oil Terminal is expected to generate 2.02 times less return on investment than Aages SA. In addition to that, Oil Terminal is 1.59 times more volatile than Aages SA. It trades about 0.01 of its total potential returns per unit of risk. Aages SA is currently generating about 0.04 per unit of volatility. If you would invest  640.00  in Aages SA on December 28, 2024 and sell it today you would earn a total of  20.00  from holding Aages SA or generate 3.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Oil Terminal C  vs.  Aages SA

Oil Terminal C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oil Terminal C has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Oil Terminal is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Aages SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aages SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Aages SA is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Oil Terminal and Aages SA

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

The idea behind Oil Terminal C and Aages 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.