Correlation Between Imgp Oldfield and Energy Basic

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

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

Diversification Opportunities for Imgp Oldfield and Energy Basic

-0.51

Correlation Coefficient

Imgp Oldfield  Energy Basic

Excellent diversification

The 3 months correlation between Imgp and Energy is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Imgp Oldfield International and Energy Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Basic Materials and Imgp Oldfield 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 Imgp Oldfield International are associated (or correlated) with Energy Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Basic Materials has no effect on the direction of Imgp Oldfield i.e., Imgp Oldfield and Energy Basic go up and down completely randomly.

Pair Corralation between Imgp Oldfield and Energy Basic

Assuming the 90 days horizon Imgp Oldfield International is expected to generate 0.52 times more return on investment than Energy Basic. However, Imgp Oldfield International is 1.94 times less risky than Energy Basic. It trades about 0.08 of its potential returns per unit of risk. Energy Basic Materials is currently generating about -0.02 per unit of risk. If you would invest  564.00  in Imgp Oldfield International on September 14, 2024 and sell it today you would earn a total of  28.00  from holding Imgp Oldfield International or generate 4.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.03%
Values	Daily Returns

Imgp Oldfield International  vs.  Energy Basic Materials

Imgp Oldfield Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imgp Oldfield International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Imgp Oldfield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Energy Basic Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energy Basic Materials has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Energy Basic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Imgp Oldfield and Energy Basic

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

The idea behind Imgp Oldfield International and Energy Basic Materials 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..