Correlation Between XTL Biopharmaceutica and Bazan Oil
Can any of the company-specific risk be diversified away by investing in both XTL Biopharmaceutica 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 XTL Biopharmaceutica and Bazan Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XTL Biopharmaceuticals and Bazan Oil Refineries, you can compare the effects of market volatilities on XTL Biopharmaceutica 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 XTL Biopharmaceutica with a short position of Bazan Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTL Biopharmaceutica and Bazan Oil.
Diversification Opportunities for XTL Biopharmaceutica and Bazan Oil
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XTL and Bazan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding XTL Biopharmaceuticals 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 XTL Biopharmaceutica 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 XTL Biopharmaceuticals 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 XTL Biopharmaceutica i.e., XTL Biopharmaceutica and Bazan Oil go up and down completely randomly.
Pair Corralation between XTL Biopharmaceutica and Bazan Oil
Assuming the 90 days trading horizon XTL Biopharmaceuticals is expected to generate 8.34 times more return on investment than Bazan Oil. However, XTL Biopharmaceutica is 8.34 times more volatile than Bazan Oil Refineries. It trades about 0.2 of its potential returns per unit of risk. Bazan Oil Refineries is currently generating about -0.26 per unit of risk. If you would invest 340.00 in XTL Biopharmaceuticals on January 24, 2024 and sell it today you would earn a total of 560.00 from holding XTL Biopharmaceuticals or generate 164.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XTL Biopharmaceuticals vs. Bazan Oil Refineries
Performance |
| Timeline |
| XTL Biopharmaceuticals |
| Bazan Oil Refineries |
XTL Biopharmaceutica and Bazan Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XTL Biopharmaceutica and Bazan Oil
The main advantage of trading using opposite XTL Biopharmaceutica and Bazan Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XTL Biopharmaceutica 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.| XTL Biopharmaceutica vs. Nice | XTL Biopharmaceutica vs. Bank Leumi Le Israel | XTL Biopharmaceutica vs. ICL Israel Chemicals | XTL Biopharmaceutica vs. Mizrahi Tefahot |
| Bazan Oil vs. Fattal 1998 Holdings | Bazan Oil vs. El Al Israel | Bazan Oil vs. Bank Leumi Le Israel | Bazan Oil vs. Teva Pharmaceutical Industries |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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