Correlation Between Oil Equipment and Falling Dollar
Can any of the company-specific risk be diversified away by investing in both Oil Equipment and Falling Dollar 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 Equipment and Falling Dollar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Equipment Services and Falling Dollar Profund, you can compare the effects of market volatilities on Oil Equipment and Falling Dollar 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 Equipment with a short position of Falling Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Equipment and Falling Dollar.
Diversification Opportunities for Oil Equipment and Falling Dollar
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oil and Falling is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Oil Equipment Services and Falling Dollar Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falling Dollar Profund and Oil Equipment 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 Equipment Services are associated (or correlated) with Falling Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falling Dollar Profund has no effect on the direction of Oil Equipment i.e., Oil Equipment and Falling Dollar go up and down completely randomly.
Pair Corralation between Oil Equipment and Falling Dollar
Assuming the 90 days horizon Oil Equipment Services is expected to under-perform the Falling Dollar. In addition to that, Oil Equipment is 9.01 times more volatile than Falling Dollar Profund. It trades about -0.05 of its total potential returns per unit of risk. Falling Dollar Profund is currently generating about 0.17 per unit of volatility. If you would invest 1,326 in Falling Dollar Profund on March 27, 2025 and sell it today you would earn a total of 86.00 from holding Falling Dollar Profund or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Oil Equipment Services vs. Falling Dollar Profund
Performance |
| Timeline |
| Oil Equipment Services |
| Falling Dollar Profund |
Oil Equipment and Falling Dollar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Equipment and Falling Dollar
The main advantage of trading using opposite Oil Equipment and Falling Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Equipment position performs unexpectedly, Falling Dollar 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 Falling Dollar will offset losses from the drop in Falling Dollar's long position.| Oil Equipment vs. Vanguard Short Term Government | Oil Equipment vs. Shenkman Short Duration | Oil Equipment vs. Delaware Investments Ultrashort | Oil Equipment vs. Siit Ultra Short |
| Falling Dollar vs. Massmutual Premier Diversified | Falling Dollar vs. Pro Blend Servative Term | Falling Dollar vs. Aqr Diversified Arbitrage | Falling Dollar vs. Multimanager Lifestyle Servative |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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