Correlation Between Oil Gas and Wasatch Frontier
Can any of the company-specific risk be diversified away by investing in both Oil Gas and Wasatch Frontier 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 Oil Gas and Wasatch Frontier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Wasatch Frontier Emerging, you can compare the effects of market volatilities on Oil Gas and Wasatch Frontier 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 Oil Gas with a short position of Wasatch Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Wasatch Frontier.
Diversification Opportunities for Oil Gas and Wasatch Frontier
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oil and Wasatch is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Wasatch Frontier Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Frontier Emerging and Oil Gas 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 Oil Gas Ultrasector are associated (or correlated) with Wasatch Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Frontier Emerging has no effect on the direction of Oil Gas i.e., Oil Gas and Wasatch Frontier go up and down completely randomly.
Pair Corralation between Oil Gas and Wasatch Frontier
Assuming the 90 days horizon Oil Gas Ultrasector is expected to generate 2.45 times more return on investment than Wasatch Frontier. However, Oil Gas is 2.45 times more volatile than Wasatch Frontier Emerging. It trades about 0.03 of its potential returns per unit of risk. Wasatch Frontier Emerging is currently generating about -0.15 per unit of risk. If you would invest 3,394 in Oil Gas Ultrasector on August 22, 2025 and sell it today you would earn a total of 90.00 from holding Oil Gas Ultrasector or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Wasatch Frontier Emerging
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Wasatch Frontier Emerging |
Oil Gas and Wasatch Frontier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Wasatch Frontier
The main advantage of trading using opposite Oil Gas and Wasatch Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas position performs unexpectedly, Wasatch Frontier 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 Wasatch Frontier will offset losses from the drop in Wasatch Frontier's long position.| Oil Gas vs. Monongahela All Cap | Oil Gas vs. Guggenheim Alpha Opportunity | Oil Gas vs. Villere Equity Fund | Oil Gas vs. Wasatch Frontier Emerging |
| Wasatch Frontier vs. Consumer Products Fund | Wasatch Frontier vs. Guggenheim Alpha Opportunity | Wasatch Frontier vs. Oil Gas Ultrasector | Wasatch Frontier vs. Villere Equity Fund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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