Correlation Between International Petroleum and International Petroleum

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

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

Diversification Opportunities for International Petroleum and International Petroleum

0.95

Correlation Coefficient

International Petroleum  International Petroleum

Almost no diversification

The 3 months correlation between International and International is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding International Petroleum Corp and International Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Petroleum and International Petroleum 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 International Petroleum Corp are associated (or correlated) with International Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Petroleum has no effect on the direction of International Petroleum i.e., International Petroleum and International Petroleum go up and down completely randomly.

Pair Corralation between International Petroleum and International Petroleum

Assuming the 90 days trading horizon International Petroleum Corp is expected to under-perform the International Petroleum. In addition to that, International Petroleum is 1.08 times more volatile than International Petroleum. It trades about -0.09 of its total potential returns per unit of risk. International Petroleum is currently generating about -0.09 per unit of volatility. If you would invest  14,220  in International Petroleum on September 3, 2024 and sell it today you would lose (1,810) from holding International Petroleum or give up 12.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

International Petroleum Corp  vs.  International Petroleum

International Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Petroleum Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

International Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with International Petroleum and International Petroleum

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

The idea behind International Petroleum Corp and International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.