Correlation Between Motor Oil and Kri Kri

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

By analyzing existing cross correlation between Motor Oil Corinth and Kri Kri Milk Industry, you can compare the effects of market volatilities on Motor Oil and Kri Kri 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 Motor Oil with a short position of Kri Kri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motor Oil and Kri Kri.

Diversification Opportunities for Motor Oil and Kri Kri

-0.6

Correlation Coefficient

Motor Oil  Kri Kri

Excellent diversification

The 3 months correlation between Motor and Kri is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Motor Oil Corinth and Kri Kri Milk Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kri Kri Milk and Motor Oil 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 Motor Oil Corinth are associated (or correlated) with Kri Kri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kri Kri Milk has no effect on the direction of Motor Oil i.e., Motor Oil and Kri Kri go up and down completely randomly.

Pair Corralation between Motor Oil and Kri Kri

Assuming the 90 days trading horizon Motor Oil is expected to generate 6.2 times less return on investment than Kri Kri. In addition to that, Motor Oil is 1.15 times more volatile than Kri Kri Milk Industry. It trades about 0.02 of its total potential returns per unit of risk. Kri Kri Milk Industry is currently generating about 0.12 per unit of volatility. If you would invest  632.00  in Kri Kri Milk Industry on September 14, 2024 and sell it today you would earn a total of  873.00  from holding Kri Kri Milk Industry or generate 138.13% return on investment over 90 days.

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

Motor Oil Corinth  vs.  Kri Kri Milk Industry

Motor Oil Corinth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Motor Oil Corinth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Motor Oil is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Kri Kri Milk

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kri Kri Milk Industry are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Kri Kri unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Motor Oil and Kri Kri

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

The idea behind Motor Oil Corinth and Kri Kri Milk Industry 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.