Correlation Between Africa Oil and Instalco Intressenter

Can any of the company-specific risk be diversified away by investing in both Africa Oil and Instalco Intressenter 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 Africa Oil and Instalco Intressenter into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Africa Oil Corp and Instalco Intressenter AB, you can compare the effects of market volatilities on Africa Oil and Instalco Intressenter 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 Africa Oil with a short position of Instalco Intressenter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Africa Oil and Instalco Intressenter.

Diversification Opportunities for Africa Oil and Instalco Intressenter

-0.01

Correlation Coefficient

Africa Oil  Instalco Intressenter

Good diversification

The 3 months correlation between Africa and Instalco is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Africa Oil Corp and Instalco Intressenter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instalco Intressenter and Africa Oil 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 Africa Oil Corp are associated (or correlated) with Instalco Intressenter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instalco Intressenter has no effect on the direction of Africa Oil i.e., Africa Oil and Instalco Intressenter go up and down completely randomly.

Pair Corralation between Africa Oil and Instalco Intressenter

Assuming the 90 days trading horizon Africa Oil Corp is expected to generate 0.38 times more return on investment than Instalco Intressenter. However, Africa Oil Corp is 2.61 times less risky than Instalco Intressenter. It trades about -0.06 of its potential returns per unit of risk. Instalco Intressenter AB is currently generating about -0.03 per unit of risk. If you would invest  1,283  in Africa Oil Corp on April 25, 2025 and sell it today you would lose (78.00) from holding Africa Oil Corp or give up 6.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Africa Oil Corp  vs.  Instalco Intressenter AB

Africa Oil Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Africa Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Africa Oil is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Instalco Intressenter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Instalco Intressenter AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Africa Oil and Instalco Intressenter

The main advantage of trading using opposite Africa Oil and Instalco Intressenter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Africa Oil position performs unexpectedly, Instalco Intressenter 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 Instalco Intressenter will offset losses from the drop in Instalco Intressenter's long position.

The idea behind Africa Oil Corp and Instalco Intressenter AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.