Correlation Between USI Corp and Ocean Plastics
Can any of the company-specific risk be diversified away by investing in both USI Corp and Ocean Plastics 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 USI Corp and Ocean Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USI Corp and Ocean Plastics Co, you can compare the effects of market volatilities on USI Corp and Ocean Plastics 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 USI Corp with a short position of Ocean Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of USI Corp and Ocean Plastics.
Diversification Opportunities for USI Corp and Ocean Plastics
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USI and Ocean is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding USI Corp and Ocean Plastics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Plastics and USI Corp 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 USI Corp are associated (or correlated) with Ocean Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Plastics has no effect on the direction of USI Corp i.e., USI Corp and Ocean Plastics go up and down completely randomly.
Pair Corralation between USI Corp and Ocean Plastics
Assuming the 90 days trading horizon USI Corp is expected to under-perform the Ocean Plastics. In addition to that, USI Corp is 1.19 times more volatile than Ocean Plastics Co. It trades about -0.05 of its total potential returns per unit of risk. Ocean Plastics Co is currently generating about 0.0 per unit of volatility. If you would invest 3,395 in Ocean Plastics Co on September 3, 2024 and sell it today you would lose (100.00) from holding Ocean Plastics Co or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
USI Corp vs. Ocean Plastics Co
Performance |
| Timeline |
| USI Corp |
| Ocean Plastics |
USI Corp and Ocean Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USI Corp and Ocean Plastics
The main advantage of trading using opposite USI Corp and Ocean Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USI Corp position performs unexpectedly, Ocean Plastics 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 Ocean Plastics will offset losses from the drop in Ocean Plastics' long position.| USI Corp vs. Asia Polymer Corp | USI Corp vs. Taiwan Styrene Monomer | USI Corp vs. UPC Technology Corp | USI Corp vs. China Petrochemical Development |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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