Correlation Between InPlay Oil and Primaris Retail

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Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Primaris Retail 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 InPlay Oil and Primaris Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Primaris Retail RE, you can compare the effects of market volatilities on InPlay Oil and Primaris Retail 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 InPlay Oil with a short position of Primaris Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Primaris Retail.

Diversification Opportunities for InPlay Oil and Primaris Retail

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between InPlay and Primaris is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Primaris Retail RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primaris Retail RE and InPlay 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 InPlay Oil Corp are associated (or correlated) with Primaris Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primaris Retail RE has no effect on the direction of InPlay Oil i.e., InPlay Oil and Primaris Retail go up and down completely randomly.

Pair Corralation between InPlay Oil and Primaris Retail

Assuming the 90 days trading horizon InPlay Oil Corp is expected to generate 2.88 times more return on investment than Primaris Retail. However, InPlay Oil is 2.88 times more volatile than Primaris Retail RE. It trades about 0.2 of its potential returns per unit of risk. Primaris Retail RE is currently generating about 0.1 per unit of risk. If you would invest  720.00  in InPlay Oil Corp on April 23, 2025 and sell it today you would earn a total of  283.00  from holding InPlay Oil Corp or generate 39.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

InPlay Oil Corp  vs.  Primaris Retail RE

 Performance 
       Timeline  
InPlay Oil Corp 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in InPlay Oil Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, InPlay Oil displayed solid returns over the last few months and may actually be approaching a breakup point.
Primaris Retail RE 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Primaris Retail RE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Primaris Retail is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

InPlay Oil and Primaris Retail Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with InPlay Oil and Primaris Retail

The main advantage of trading using opposite InPlay Oil and Primaris Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Primaris Retail 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 Primaris Retail will offset losses from the drop in Primaris Retail's long position.
The idea behind InPlay Oil Corp and Primaris Retail RE 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.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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