Correlation Between Oil Terminal and Antibiotice

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

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

Diversification Opportunities for Oil Terminal and Antibiotice

0.3

Correlation Coefficient

Oil Terminal  Antibiotice

Weak diversification

The 3 months correlation between Oil and Antibiotice is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Oil Terminal C and Antibiotice Ia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antibiotice Ia and Oil Terminal 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 Oil Terminal C are associated (or correlated) with Antibiotice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antibiotice Ia has no effect on the direction of Oil Terminal i.e., Oil Terminal and Antibiotice go up and down completely randomly.

Pair Corralation between Oil Terminal and Antibiotice

Assuming the 90 days trading horizon Oil Terminal C is expected to generate 0.71 times more return on investment than Antibiotice. However, Oil Terminal C is 1.41 times less risky than Antibiotice. It trades about 0.01 of its potential returns per unit of risk. Antibiotice Ia is currently generating about -0.04 per unit of risk. If you would invest  12.00  in Oil Terminal C on September 13, 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

Oil Terminal C  vs.  Antibiotice Ia

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.

Antibiotice Ia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antibiotice Ia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Oil Terminal and Antibiotice

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

The idea behind Oil Terminal C and Antibiotice Ia 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.

Check out your portfolio center.

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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.