Correlation Between Upper Street and Sentry Petroleum

Can any of the company-specific risk be diversified away by investing in both Upper Street and Sentry Petroleum 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 Upper Street and Sentry Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Upper Street Marketing and Sentry Petroleum, you can compare the effects of market volatilities on Upper Street and Sentry Petroleum 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 Upper Street with a short position of Sentry Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upper Street and Sentry Petroleum.

Diversification Opportunities for Upper Street and Sentry Petroleum

1.0

Correlation Coefficient

Upper Street  Sentry Petroleum

No risk reduction

The 3 months correlation between Upper and Sentry is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Upper Street Marketing and Sentry Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentry Petroleum and Upper Street 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 Upper Street Marketing are associated (or correlated) with Sentry Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentry Petroleum has no effect on the direction of Upper Street i.e., Upper Street and Sentry Petroleum go up and down completely randomly.

Pair Corralation between Upper Street and Sentry Petroleum

If you would invest  0.01  in Sentry Petroleum on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Sentry Petroleum or generate 0.0% return on investment over 90 days.

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

Upper Street Marketing  vs.  Sentry Petroleum

Upper Street Marketing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upper Street Marketing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Upper Street is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Sentry Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Upper Street and Sentry Petroleum

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

The idea behind Upper Street Marketing and Sentry Petroleum 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .