Correlation Between Rayonier Advanced and CNOOC

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Rayonier Advanced and CNOOC 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 Rayonier Advanced and CNOOC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rayonier Advanced Materials and CNOOC, you can compare the effects of market volatilities on Rayonier Advanced and CNOOC 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 Rayonier Advanced with a short position of CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rayonier Advanced and CNOOC.

Diversification Opportunities for Rayonier Advanced and CNOOC

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Rayonier and CNOOC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Rayonier Advanced Materials and CNOOC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC and Rayonier Advanced 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 Rayonier Advanced Materials are associated (or correlated) with CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC has no effect on the direction of Rayonier Advanced i.e., Rayonier Advanced and CNOOC go up and down completely randomly.

Pair Corralation between Rayonier Advanced and CNOOC

Assuming the 90 days horizon Rayonier Advanced Materials is expected to generate 34.08 times more return on investment than CNOOC. However, Rayonier Advanced is 34.08 times more volatile than CNOOC. It trades about 0.03 of its potential returns per unit of risk. CNOOC is currently generating about -0.13 per unit of risk. If you would invest  745.00  in Rayonier Advanced Materials on October 27, 2024 and sell it today you would earn a total of  15.00  from holding Rayonier Advanced Materials or generate 2.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Rayonier Advanced Materials  vs.  CNOOC

 Performance 
       Timeline  
Rayonier Advanced 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Rayonier Advanced Materials are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Rayonier Advanced may actually be approaching a critical reversion point that can send shares even higher in February 2025.
CNOOC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CNOOC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CNOOC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Rayonier Advanced and CNOOC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rayonier Advanced and CNOOC

The main advantage of trading using opposite Rayonier Advanced and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rayonier Advanced position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.
The idea behind Rayonier Advanced Materials and CNOOC 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.
Check out your portfolio center.
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Global Correlations
Find global opportunities by holding instruments from different markets