Correlation Between Santierul Naval and Oil Terminal

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

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

Diversification Opportunities for Santierul Naval and Oil Terminal

0.23

Correlation Coefficient

Santierul Naval  Oil Terminal

Modest diversification

The 3 months correlation between Santierul and Oil is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Santierul Naval Orsova and Oil Terminal C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Terminal C and Santierul Naval 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 Santierul Naval Orsova are associated (or correlated) with Oil Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Terminal C has no effect on the direction of Santierul Naval i.e., Santierul Naval and Oil Terminal go up and down completely randomly.

Pair Corralation between Santierul Naval and Oil Terminal

Assuming the 90 days trading horizon Santierul Naval Orsova is expected to under-perform the Oil Terminal. But the stock apears to be less risky and, when comparing its historical volatility, Santierul Naval Orsova is 1.34 times less risky than Oil Terminal. The stock trades about -0.04 of its potential returns per unit of risk. The Oil Terminal C is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Oil Terminal C on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Oil Terminal C or generate 0.0% return on investment over 90 days.

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

Santierul Naval Orsova  vs.  Oil Terminal C

Santierul Naval Orsova

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Santierul Naval Orsova are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Santierul Naval may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oil Terminal C

Risk-Adjusted Performance

0 of 100

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 recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Santierul Naval and Oil Terminal

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

The idea behind Santierul Naval Orsova and Oil Terminal C 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.