Correlation Between Invisio Communications and Africa Oil

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Invisio Communications and Africa Oil 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 Invisio Communications and Africa Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invisio Communications AB and Africa Oil Corp, you can compare the effects of market volatilities on Invisio Communications and Africa Oil 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 Invisio Communications with a short position of Africa Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invisio Communications and Africa Oil.

Diversification Opportunities for Invisio Communications and Africa Oil

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Invisio and Africa is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Invisio Communications AB and Africa Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Oil Corp and Invisio Communications 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 Invisio Communications AB are associated (or correlated) with Africa Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Oil Corp has no effect on the direction of Invisio Communications i.e., Invisio Communications and Africa Oil go up and down completely randomly.

Pair Corralation between Invisio Communications and Africa Oil

Assuming the 90 days trading horizon Invisio Communications is expected to generate 1.9 times less return on investment than Africa Oil. In addition to that, Invisio Communications is 1.21 times more volatile than Africa Oil Corp. It trades about 0.11 of its total potential returns per unit of risk. Africa Oil Corp is currently generating about 0.24 per unit of volatility. If you would invest  1,625  in Africa Oil Corp on January 29, 2024 and sell it today you would earn a total of  346.00  from holding Africa Oil Corp or generate 21.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Invisio Communications AB  vs.  Africa Oil Corp

 Performance 
       Timeline  
Invisio Communications 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Invisio Communications AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Invisio Communications unveiled solid returns over the last few months and may actually be approaching a breakup point.
Africa Oil Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Africa Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Africa Oil is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Invisio Communications and Africa Oil Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Invisio Communications and Africa Oil

The main advantage of trading using opposite Invisio Communications and Africa Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invisio Communications position performs unexpectedly, Africa Oil 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 Africa Oil will offset losses from the drop in Africa Oil's long position.
The idea behind Invisio Communications AB and Africa Oil Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Global Correlations
Find global opportunities by holding instruments from different markets
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Commodity Directory
Find actively traded commodities issued by global exchanges
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated