Correlation Between ONEOK and Gateway Real
Can any of the company-specific risk be diversified away by investing in both ONEOK and Gateway Real 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 ONEOK and Gateway Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Gateway Real Estate, you can compare the effects of market volatilities on ONEOK and Gateway Real 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 ONEOK with a short position of Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Gateway Real.
Diversification Opportunities for ONEOK and Gateway Real
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ONEOK and Gateway is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate and ONEOK 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 ONEOK Inc are associated (or correlated) with Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of ONEOK i.e., ONEOK and Gateway Real go up and down completely randomly.
Pair Corralation between ONEOK and Gateway Real
Assuming the 90 days horizon ONEOK Inc is expected to generate 0.17 times more return on investment than Gateway Real. However, ONEOK Inc is 5.74 times less risky than Gateway Real. It trades about -0.68 of its potential returns per unit of risk. Gateway Real Estate is currently generating about -0.28 per unit of risk. If you would invest 11,244 in ONEOK Inc on September 23, 2024 and sell it today you would lose (1,879) from holding ONEOK Inc or give up 16.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ONEOK Inc vs. Gateway Real Estate
Performance |
Timeline |
ONEOK Inc |
Gateway Real Estate |
ONEOK and Gateway Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ONEOK and Gateway Real
The main advantage of trading using opposite ONEOK and Gateway Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Gateway Real 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 Gateway Real will offset losses from the drop in Gateway Real's long position.ONEOK vs. Enbridge | ONEOK vs. Cheniere Energy | ONEOK vs. The Williams Companies | ONEOK vs. Pembina Pipeline Corp |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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