Correlation Between Ratio Energies and Bazan Oil
Can any of the company-specific risk be diversified away by investing in both Ratio Energies 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 Ratio Energies and Bazan Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ratio Energies LP and Bazan Oil Refineries, you can compare the effects of market volatilities on Ratio Energies 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 Ratio Energies with a short position of Bazan Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratio Energies and Bazan Oil.
Diversification Opportunities for Ratio Energies and Bazan Oil
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ratio and Bazan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ratio Energies LP 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 Ratio Energies 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 Ratio Energies LP 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 Ratio Energies i.e., Ratio Energies and Bazan Oil go up and down completely randomly.
Pair Corralation between Ratio Energies and Bazan Oil
Assuming the 90 days trading horizon Ratio Energies LP is expected to generate 0.61 times more return on investment than Bazan Oil. However, Ratio Energies LP is 1.64 times less risky than Bazan Oil. It trades about 0.05 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 28,980 in Ratio Energies LP on January 26, 2024 and sell it today you would earn a total of 1,020 from holding Ratio Energies LP or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ratio Energies LP vs. Bazan Oil Refineries
Performance |
| Timeline |
| Ratio Energies LP |
| Bazan Oil Refineries |
Ratio Energies and Bazan Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ratio Energies and Bazan Oil
The main advantage of trading using opposite Ratio Energies and Bazan Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratio Energies 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.| Ratio Energies vs. OPC Energy | Ratio Energies vs. Delek Group | Ratio Energies vs. Lapidoth | Ratio Energies vs. Naphtha |
| Bazan Oil vs. Delek Group | Bazan Oil vs. Bank Leumi Le Israel | Bazan Oil vs. ICL Israel Chemicals | Bazan Oil vs. Bank Hapoalim |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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