Correlation Between Basso Industry and Ocean Plastics
Can any of the company-specific risk be diversified away by investing in both Basso Industry 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 Basso Industry and Ocean Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basso Industry Corp and Ocean Plastics Co, you can compare the effects of market volatilities on Basso Industry 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 Basso Industry with a short position of Ocean Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basso Industry and Ocean Plastics.
Diversification Opportunities for Basso Industry and Ocean Plastics
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Basso and Ocean is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Basso Industry 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 Basso Industry 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 Basso Industry 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 Basso Industry i.e., Basso Industry and Ocean Plastics go up and down completely randomly.
Pair Corralation between Basso Industry and Ocean Plastics
Assuming the 90 days trading horizon Basso Industry Corp is expected to generate 0.87 times more return on investment than Ocean Plastics. However, Basso Industry Corp is 1.15 times less risky than Ocean Plastics. It trades about 0.01 of its potential returns per unit of risk. Ocean Plastics Co is currently generating about -0.01 per unit of risk. If you would invest 4,285 in Basso Industry Corp on September 3, 2024 and sell it today you would lose (15.00) from holding Basso Industry Corp or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basso Industry Corp vs. Ocean Plastics Co
Performance |
| Timeline |
| Basso Industry Corp |
| Ocean Plastics |
Basso Industry and Ocean Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basso Industry and Ocean Plastics
The main advantage of trading using opposite Basso Industry and Ocean Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basso Industry 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.| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |