Correlation Between ONEOK and Twitter
Can any of the company-specific risk be diversified away by investing in both ONEOK and Twitter 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 Twitter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Twitter, you can compare the effects of market volatilities on ONEOK and Twitter 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 Twitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Twitter.
Diversification Opportunities for ONEOK and Twitter
Poor diversification
The 3 months correlation between ONEOK and Twitter is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Twitter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twitter 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 Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of ONEOK i.e., ONEOK and Twitter go up and down completely randomly.
Pair Corralation between ONEOK and Twitter
If you would invest 7,779 in ONEOK Inc on January 17, 2024 and sell it today you would earn a total of 6.00 from holding ONEOK Inc or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
ONEOK Inc vs. Twitter
Performance |
| Timeline |
| ONEOK Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ONEOK and Twitter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Twitter
The main advantage of trading using opposite ONEOK and Twitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Twitter 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 Twitter will offset losses from the drop in Twitter's long position.| ONEOK vs. Enterprise Products Partners | ONEOK vs. MPLX LP | ONEOK vs. Energy Transfer LP | ONEOK vs. Plains All American |
| Twitter vs. First Watch Restaurant | Twitter vs. Hannon Armstrong Sustainable | Twitter vs. Dominos Pizza | Twitter vs. Shake Shack |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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