Correlation Between Internet Gold and Bazan Oil
Can any of the company-specific risk be diversified away by investing in both Internet Gold 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 Internet Gold and Bazan Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Gold Golden and Bazan Oil Refineries, you can compare the effects of market volatilities on Internet Gold 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 Internet Gold with a short position of Bazan Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Gold and Bazan Oil.
Diversification Opportunities for Internet Gold and Bazan Oil
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Internet and Bazan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Internet Gold Golden 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 Internet Gold 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 Internet Gold Golden 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 Internet Gold i.e., Internet Gold and Bazan Oil go up and down completely randomly.
Pair Corralation between Internet Gold and Bazan Oil
Assuming the 90 days trading horizon Internet Gold Golden is expected to under-perform the Bazan Oil. In addition to that, Internet Gold is 2.2 times more volatile than Bazan Oil Refineries. It trades about -0.04 of its total potential returns per unit of risk. Bazan Oil Refineries is currently generating about 0.0 per unit of volatility. If you would invest 12,268 in Bazan Oil Refineries on January 20, 2024 and sell it today you would lose (1,468) from holding Bazan Oil Refineries or give up 11.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Gold Golden vs. Bazan Oil Refineries
Performance |
| Timeline |
| Internet Gold Golden |
| Bazan Oil Refineries |
Internet Gold and Bazan Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Gold and Bazan Oil
The main advantage of trading using opposite Internet Gold and Bazan Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Gold 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.| Internet Gold vs. Bezeq Israeli Telecommunication | Internet Gold vs. Partner | Internet Gold vs. Cellcom Israel | Internet Gold vs. B Communications |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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