Correlation Between Otis Worldwide and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Otis Worldwide and Ballard Power 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 Otis Worldwide and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otis Worldwide Corp and Ballard Power Systems, you can compare the effects of market volatilities on Otis Worldwide and Ballard Power 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 Otis Worldwide with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otis Worldwide and Ballard Power.
Diversification Opportunities for Otis Worldwide and Ballard Power
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Otis and Ballard is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Otis Worldwide Corp and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Otis Worldwide 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 Otis Worldwide Corp are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Otis Worldwide i.e., Otis Worldwide and Ballard Power go up and down completely randomly.
Pair Corralation between Otis Worldwide and Ballard Power
Assuming the 90 days horizon Otis Worldwide Corp is expected to generate 0.16 times more return on investment than Ballard Power. However, Otis Worldwide Corp is 6.28 times less risky than Ballard Power. It trades about 0.03 of its potential returns per unit of risk. Ballard Power Systems is currently generating about -0.09 per unit of risk. If you would invest 9,375 in Otis Worldwide Corp on August 25, 2024 and sell it today you would earn a total of 39.00 from holding Otis Worldwide Corp or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Otis Worldwide Corp vs. Ballard Power Systems
Performance |
| Timeline |
| Otis Worldwide Corp |
| Ballard Power Systems |
Otis Worldwide and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otis Worldwide and Ballard Power
The main advantage of trading using opposite Otis Worldwide and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otis Worldwide position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Otis Worldwide vs. Superior Plus Corp | Otis Worldwide vs. NMI Holdings | Otis Worldwide vs. Origin Agritech | Otis Worldwide vs. SIVERS SEMICONDUCTORS AB |
| Ballard Power vs. Powercell Sweden | Ballard Power vs. Nel ASA | Ballard Power vs. ITM Power Plc | Ballard Power vs. Plug Power |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |