Correlation Between AWILCO DRILLING and OSRAM LICHT
Can any of the company-specific risk be diversified away by investing in both AWILCO DRILLING and OSRAM LICHT 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 AWILCO DRILLING and OSRAM LICHT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AWILCO DRILLING PLC and OSRAM LICHT N, you can compare the effects of market volatilities on AWILCO DRILLING and OSRAM LICHT 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 AWILCO DRILLING with a short position of OSRAM LICHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of AWILCO DRILLING and OSRAM LICHT.
Diversification Opportunities for AWILCO DRILLING and OSRAM LICHT
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AWILCO and OSRAM is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding AWILCO DRILLING PLC and OSRAM LICHT N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSRAM LICHT N and AWILCO DRILLING 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 AWILCO DRILLING PLC are associated (or correlated) with OSRAM LICHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSRAM LICHT N has no effect on the direction of AWILCO DRILLING i.e., AWILCO DRILLING and OSRAM LICHT go up and down completely randomly.
Pair Corralation between AWILCO DRILLING and OSRAM LICHT
Assuming the 90 days trading horizon AWILCO DRILLING PLC is expected to generate 26.39 times more return on investment than OSRAM LICHT. However, AWILCO DRILLING is 26.39 times more volatile than OSRAM LICHT N. It trades about 0.07 of its potential returns per unit of risk. OSRAM LICHT N is currently generating about 0.18 per unit of risk. If you would invest 186.00 in AWILCO DRILLING PLC on November 6, 2024 and sell it today you would earn a total of 10.00 from holding AWILCO DRILLING PLC or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AWILCO DRILLING PLC vs. OSRAM LICHT N
Performance |
| Timeline |
| AWILCO DRILLING PLC |
| OSRAM LICHT N |
AWILCO DRILLING and OSRAM LICHT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AWILCO DRILLING and OSRAM LICHT
The main advantage of trading using opposite AWILCO DRILLING and OSRAM LICHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AWILCO DRILLING position performs unexpectedly, OSRAM LICHT 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 OSRAM LICHT will offset losses from the drop in OSRAM LICHT's long position.| AWILCO DRILLING vs. Spirent Communications plc | AWILCO DRILLING vs. Clearside Biomedical | AWILCO DRILLING vs. MeVis Medical Solutions | AWILCO DRILLING vs. CRISPR Therapeutics AG |
| OSRAM LICHT vs. EMBARK EDUCATION LTD | OSRAM LICHT vs. Northern Data AG | OSRAM LICHT vs. Linedata Services SA | OSRAM LICHT vs. Alliance Data Systems |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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