Correlation Between Oceanic Beverages and NEXCOM International
Can any of the company-specific risk be diversified away by investing in both Oceanic Beverages and NEXCOM International 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 Oceanic Beverages and NEXCOM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceanic Beverages Co and NEXCOM International Co, you can compare the effects of market volatilities on Oceanic Beverages and NEXCOM International 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 Oceanic Beverages with a short position of NEXCOM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceanic Beverages and NEXCOM International.
Diversification Opportunities for Oceanic Beverages and NEXCOM International
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oceanic and NEXCOM is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Oceanic Beverages Co and NEXCOM International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXCOM International and Oceanic Beverages 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 Oceanic Beverages Co are associated (or correlated) with NEXCOM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXCOM International has no effect on the direction of Oceanic Beverages i.e., Oceanic Beverages and NEXCOM International go up and down completely randomly.
Pair Corralation between Oceanic Beverages and NEXCOM International
Assuming the 90 days trading horizon Oceanic Beverages Co is expected to generate 0.7 times more return on investment than NEXCOM International. However, Oceanic Beverages Co is 1.43 times less risky than NEXCOM International. It trades about 0.06 of its potential returns per unit of risk. NEXCOM International Co is currently generating about 0.04 per unit of risk. If you would invest 703.00 in Oceanic Beverages Co on September 4, 2024 and sell it today you would earn a total of 507.00 from holding Oceanic Beverages Co or generate 72.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oceanic Beverages Co vs. NEXCOM International Co
Performance |
| Timeline |
| Oceanic Beverages |
| NEXCOM International |
Oceanic Beverages and NEXCOM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceanic Beverages and NEXCOM International
The main advantage of trading using opposite Oceanic Beverages and NEXCOM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceanic Beverages position performs unexpectedly, NEXCOM International 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 NEXCOM International will offset losses from the drop in NEXCOM International's long position.| Oceanic Beverages vs. Hey Song Corp | Oceanic Beverages vs. AGV Products Corp | Oceanic Beverages vs. Fwusow Industry Co | Oceanic Beverages vs. Taisun Enterprise Co |
| NEXCOM International vs. Highlight Tech | NEXCOM International vs. Chicony Power Technology | NEXCOM International vs. Air Asia Co | NEXCOM International vs. Voltronic Power Technology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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