Correlation Between Imperial Petroleum and Exela Technologies
Can any of the company-specific risk be diversified away by investing in both Imperial Petroleum and Exela Technologies 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 Petroleum and Exela Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Petroleum and Exela Technologies, you can compare the effects of market volatilities on Imperial Petroleum and Exela Technologies 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 Petroleum with a short position of Exela Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Petroleum and Exela Technologies.
Diversification Opportunities for Imperial Petroleum and Exela Technologies
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Imperial and Exela is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Petroleum and Exela Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela Technologies and Imperial Petroleum 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 Petroleum are associated (or correlated) with Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of Imperial Petroleum i.e., Imperial Petroleum and Exela Technologies go up and down completely randomly.
Pair Corralation between Imperial Petroleum and Exela Technologies
Given the investment horizon of 90 days Imperial Petroleum is expected to generate 0.61 times more return on investment than Exela Technologies. However, Imperial Petroleum is 1.64 times less risky than Exela Technologies. It trades about -0.04 of its potential returns per unit of risk. Exela Technologies is currently generating about -0.04 per unit of risk. If you would invest 368.00 in Imperial Petroleum on February 5, 2024 and sell it today you would lose (17.00) from holding Imperial Petroleum or give up 4.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Imperial Petroleum vs. Exela Technologies
Performance |
Timeline |
Imperial Petroleum |
Exela Technologies |
Imperial Petroleum and Exela Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Imperial Petroleum and Exela Technologies
The main advantage of trading using opposite Imperial Petroleum and Exela Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Petroleum position performs unexpectedly, Exela Technologies 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 Exela Technologies will offset losses from the drop in Exela Technologies' long position.Imperial Petroleum vs. Tidewater Midstream and | Imperial Petroleum vs. Martin Midstream Partners | Imperial Petroleum vs. GasLog | Imperial Petroleum vs. Kinetik Holdings |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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