Correlation Between Imperial Oil and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Imperial Oil and Equinor ASA 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 Imperial Oil and Equinor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Oil and Equinor ASA ADR, you can compare the effects of market volatilities on Imperial Oil and Equinor ASA 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 Imperial Oil with a short position of Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Oil and Equinor ASA.
Diversification Opportunities for Imperial Oil and Equinor ASA
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Imperial and Equinor is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Oil and Equinor ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA ADR and Imperial 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 Imperial Oil are associated (or correlated) with Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA ADR has no effect on the direction of Imperial Oil i.e., Imperial Oil and Equinor ASA go up and down completely randomly.
Pair Corralation between Imperial Oil and Equinor ASA
Considering the 90-day investment horizon Imperial Oil is expected to generate 1.16 times more return on investment than Equinor ASA. However, Imperial Oil is 1.16 times more volatile than Equinor ASA ADR. It trades about 0.26 of its potential returns per unit of risk. Equinor ASA ADR is currently generating about 0.23 per unit of risk. If you would invest 6,163 in Imperial Oil on January 29, 2024 and sell it today you would earn a total of 907.00 from holding Imperial Oil or generate 14.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Imperial Oil vs. Equinor ASA ADR
Performance |
Timeline |
Imperial Oil |
Equinor ASA ADR |
Imperial Oil and Equinor ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Imperial Oil and Equinor ASA
The main advantage of trading using opposite Imperial Oil and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Oil position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.Imperial Oil vs. Suncor Energy | Imperial Oil vs. Ecopetrol SA ADR | Imperial Oil vs. Petroleo Brasileiro Petrobras | Imperial Oil vs. Equinor ASA ADR |
Equinor ASA vs. Shell PLC ADR | Equinor ASA vs. BP PLC ADR | Equinor ASA vs. Eni SpA ADR | Equinor ASA vs. Galp Energa |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |