Correlation Between Oil Dri and FutureFuel Corp
Can any of the company-specific risk be diversified away by investing in both Oil Dri and FutureFuel Corp 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 Dri and FutureFuel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Dri and FutureFuel Corp, you can compare the effects of market volatilities on Oil Dri and FutureFuel Corp 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 Dri with a short position of FutureFuel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Dri and FutureFuel Corp.
Diversification Opportunities for Oil Dri and FutureFuel Corp
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oil and FutureFuel is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Oil Dri and FutureFuel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FutureFuel Corp and Oil Dri 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 Dri are associated (or correlated) with FutureFuel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FutureFuel Corp has no effect on the direction of Oil Dri i.e., Oil Dri and FutureFuel Corp go up and down completely randomly.
Pair Corralation between Oil Dri and FutureFuel Corp
Considering the 90-day investment horizon Oil Dri is expected to generate 1.16 times more return on investment than FutureFuel Corp. However, Oil Dri is 1.16 times more volatile than FutureFuel Corp. It trades about 0.27 of its potential returns per unit of risk. FutureFuel Corp is currently generating about -0.01 per unit of risk. If you would invest 4,881 in Oil Dri on March 28, 2025 and sell it today you would earn a total of 912.00 from holding Oil Dri or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Dri vs. FutureFuel Corp
Performance |
| Timeline |
| Oil Dri |
| FutureFuel Corp |
Oil Dri and FutureFuel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Dri and FutureFuel Corp
The main advantage of trading using opposite Oil Dri and FutureFuel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Dri position performs unexpectedly, FutureFuel Corp 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 FutureFuel Corp will offset losses from the drop in FutureFuel Corp's long position.| Oil Dri vs. H B Fuller | Oil Dri vs. Minerals Technologies | Oil Dri vs. Quaker Chemical | Oil Dri vs. Sensient Technologies |
| FutureFuel Corp vs. Oil Dri | FutureFuel Corp vs. Quaker Chemical | FutureFuel Corp vs. Ecovyst | FutureFuel Corp vs. Minerals Technologies |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |