Correlation Between Oil Natural and Juniper Hotels

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

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

Diversification Opportunities for Oil Natural and Juniper Hotels

0.59

Correlation Coefficient

Oil Natural  Juniper Hotels

Very weak diversification

The 3 months correlation between Oil and Juniper is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Oil Natural Gas and Juniper Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Hotels and Oil Natural 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 Natural Gas are associated (or correlated) with Juniper Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper Hotels has no effect on the direction of Oil Natural i.e., Oil Natural and Juniper Hotels go up and down completely randomly.

Pair Corralation between Oil Natural and Juniper Hotels

Assuming the 90 days trading horizon Oil Natural Gas is expected to generate 0.82 times more return on investment than Juniper Hotels. However, Oil Natural Gas is 1.22 times less risky than Juniper Hotels. It trades about 0.07 of its potential returns per unit of risk. Juniper Hotels is currently generating about 0.0 per unit of risk. If you would invest  16,984  in Oil Natural Gas on October 5, 2024 and sell it today you would earn a total of  8,905  from holding Oil Natural Gas or generate 52.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	69.41%
Values	Daily Returns

Oil Natural Gas  vs.  Juniper Hotels

Oil Natural Gas

Risk-Adjusted Performance

0 of 100

Very Weak

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

Juniper Hotels

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Juniper Hotels are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Juniper Hotels is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Oil Natural and Juniper Hotels

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

The idea behind Oil Natural Gas and Juniper Hotels 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..