Correlation Between Oil Refineries and Enlight Renewable
Can any of the company-specific risk be diversified away by investing in both Oil Refineries and Enlight Renewable 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 Refineries and Enlight Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Refineries and Enlight Renewable Energy, you can compare the effects of market volatilities on Oil Refineries and Enlight Renewable 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 Refineries with a short position of Enlight Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Refineries and Enlight Renewable.
Diversification Opportunities for Oil Refineries and Enlight Renewable
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oil and Enlight is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Oil Refineries and Enlight Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Renewable Energy and Oil Refineries 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 Refineries are associated (or correlated) with Enlight Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Renewable Energy has no effect on the direction of Oil Refineries i.e., Oil Refineries and Enlight Renewable go up and down completely randomly.
Pair Corralation between Oil Refineries and Enlight Renewable
Assuming the 90 days trading horizon Oil Refineries is expected to generate 0.9 times more return on investment than Enlight Renewable. However, Oil Refineries is 1.11 times less risky than Enlight Renewable. It trades about 0.01 of its potential returns per unit of risk. Enlight Renewable Energy is currently generating about -0.05 per unit of risk. If you would invest 9,000 in Oil Refineries on September 24, 2024 and sell it today you would earn a total of 30.00 from holding Oil Refineries or generate 0.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Oil Refineries vs. Enlight Renewable Energy
Performance |
Timeline |
Oil Refineries |
Enlight Renewable Energy |
Oil Refineries and Enlight Renewable Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oil Refineries and Enlight Renewable
The main advantage of trading using opposite Oil Refineries and Enlight Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Refineries position performs unexpectedly, Enlight Renewable 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 Enlight Renewable will offset losses from the drop in Enlight Renewable's long position.Oil Refineries vs. Atreyu Capital Markets | Oil Refineries vs. IBI Inv House | Oil Refineries vs. Delek Automotive Systems | Oil Refineries vs. Scope Metals Group |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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