Correlation Between Oil Terminal and Uzinexport

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

Diversification Opportunities for Oil Terminal and Uzinexport

0.17

Correlation Coefficient

Oil Terminal  Uzinexport

Average diversification

The 3 months correlation between Oil and Uzinexport is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oil Terminal C and Uzinexport SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uzinexport 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 Uzinexport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uzinexport SA has no effect on the direction of Oil Terminal i.e., Oil Terminal and Uzinexport go up and down completely randomly.

Pair Corralation between Oil Terminal and Uzinexport

Assuming the 90 days trading horizon Oil Terminal is expected to generate 4.68 times less return on investment than Uzinexport. But when comparing it to its historical volatility, Oil Terminal C is 2.27 times less risky than Uzinexport. It trades about 0.02 of its potential returns per unit of risk. Uzinexport SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Uzinexport SA on December 4, 2024 and sell it today you would lose (1.00) from holding Uzinexport SA or give up 1.59% of portfolio value over 90 days.

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

Oil Terminal C  vs.  Uzinexport SA

Oil Terminal C

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oil Terminal C are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Oil Terminal is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Uzinexport SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Uzinexport SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Uzinexport displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oil Terminal and Uzinexport

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

The idea behind Oil Terminal C and Uzinexport 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.