Correlation Between United Maritime and ONEOK

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

By analyzing existing cross correlation between United Maritime and ONEOK Inc, you can compare the effects of market volatilities on United Maritime and ONEOK 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 United Maritime with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Maritime and ONEOK.

Diversification Opportunities for United Maritime and ONEOK

-0.61

Correlation Coefficient

United Maritime  ONEOK

Excellent diversification

The 3 months correlation between United and ONEOK is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding United Maritime and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and United Maritime 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 United Maritime are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of United Maritime i.e., United Maritime and ONEOK go up and down completely randomly.

Pair Corralation between United Maritime and ONEOK

Given the investment horizon of 90 days United Maritime is expected to generate 1.95 times more return on investment than ONEOK. However, United Maritime is 1.95 times more volatile than ONEOK Inc. It trades about -0.14 of its potential returns per unit of risk. ONEOK Inc is currently generating about -0.3 per unit of risk. If you would invest  190.00  in United Maritime on October 3, 2024 and sell it today you would lose (17.00) from holding United Maritime or give up 8.95% of portfolio value over 90 days.

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

United Maritime  vs.  ONEOK Inc

United Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ONEOK Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ONEOK Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, ONEOK may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with United Maritime and ONEOK

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

The idea behind United Maritime and ONEOK Inc 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.