Correlation Between Allmed Solutions and Bazan Oil
Can any of the company-specific risk be diversified away by investing in both Allmed Solutions and Bazan Oil 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 Allmed Solutions and Bazan Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allmed Solutions and Bazan Oil Refineries, you can compare the effects of market volatilities on Allmed Solutions and Bazan Oil 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 Allmed Solutions with a short position of Bazan Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allmed Solutions and Bazan Oil.
Diversification Opportunities for Allmed Solutions and Bazan Oil
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allmed and Bazan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Allmed Solutions and Bazan Oil Refineries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bazan Oil Refineries and Allmed Solutions 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 Allmed Solutions are associated (or correlated) with Bazan Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bazan Oil Refineries has no effect on the direction of Allmed Solutions i.e., Allmed Solutions and Bazan Oil go up and down completely randomly.
Pair Corralation between Allmed Solutions and Bazan Oil
Assuming the 90 days trading horizon Allmed Solutions is expected to generate 1.48 times more return on investment than Bazan Oil. However, Allmed Solutions is 1.48 times more volatile than Bazan Oil Refineries. It trades about 0.02 of its potential returns per unit of risk. Bazan Oil Refineries is currently generating about -0.01 per unit of risk. If you would invest 3,970 in Allmed Solutions on January 25, 2024 and sell it today you would earn a total of 180.00 from holding Allmed Solutions or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allmed Solutions vs. Bazan Oil Refineries
Performance |
| Timeline |
| Allmed Solutions |
| Bazan Oil Refineries |
Allmed Solutions and Bazan Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allmed Solutions and Bazan Oil
The main advantage of trading using opposite Allmed Solutions and Bazan Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allmed Solutions position performs unexpectedly, Bazan Oil 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 Bazan Oil will offset losses from the drop in Bazan Oil's long position.| Allmed Solutions vs. BioLine RX | Allmed Solutions vs. Bonus Biogroup | Allmed Solutions vs. Clal Biotechnology Industries | Allmed Solutions vs. Augwind Energy Tech |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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