Correlation Between GeneFerm Biotechnology and Oceanic Beverages
Can any of the company-specific risk be diversified away by investing in both GeneFerm Biotechnology and Oceanic Beverages 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 GeneFerm Biotechnology and Oceanic Beverages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeneFerm Biotechnology Co and Oceanic Beverages Co, you can compare the effects of market volatilities on GeneFerm Biotechnology and Oceanic Beverages 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 GeneFerm Biotechnology with a short position of Oceanic Beverages. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeneFerm Biotechnology and Oceanic Beverages.
Diversification Opportunities for GeneFerm Biotechnology and Oceanic Beverages
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GeneFerm and Oceanic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GeneFerm Biotechnology Co and Oceanic Beverages Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceanic Beverages and GeneFerm Biotechnology 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 GeneFerm Biotechnology Co are associated (or correlated) with Oceanic Beverages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceanic Beverages has no effect on the direction of GeneFerm Biotechnology i.e., GeneFerm Biotechnology and Oceanic Beverages go up and down completely randomly.
Pair Corralation between GeneFerm Biotechnology and Oceanic Beverages
Assuming the 90 days trading horizon GeneFerm Biotechnology Co is expected to generate 1.15 times more return on investment than Oceanic Beverages. However, GeneFerm Biotechnology is 1.15 times more volatile than Oceanic Beverages Co. It trades about 0.09 of its potential returns per unit of risk. Oceanic Beverages Co is currently generating about 0.02 per unit of risk. If you would invest 4,750 in GeneFerm Biotechnology Co on August 29, 2024 and sell it today you would earn a total of 290.00 from holding GeneFerm Biotechnology Co or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
GeneFerm Biotechnology Co vs. Oceanic Beverages Co
Performance |
| Timeline |
| GeneFerm Biotechnology |
| Oceanic Beverages |
GeneFerm Biotechnology and Oceanic Beverages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeneFerm Biotechnology and Oceanic Beverages
The main advantage of trading using opposite GeneFerm Biotechnology and Oceanic Beverages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeneFerm Biotechnology position performs unexpectedly, Oceanic Beverages 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 Oceanic Beverages will offset losses from the drop in Oceanic Beverages' long position.| GeneFerm Biotechnology vs. Lotus Pharmaceutical Co | GeneFerm Biotechnology vs. Center Laboratories | GeneFerm Biotechnology vs. Synmosa Biopharma | GeneFerm Biotechnology vs. Handa Pharmaceuticals |
| Oceanic Beverages vs. Great Wall Enterprise | Oceanic Beverages vs. Uni President Enterprises Corp | Oceanic Beverages vs. Lien Hwa Industrial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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