Correlation Between Albion Technology and Oxford Metrics
Can any of the company-specific risk be diversified away by investing in both Albion Technology and Oxford Metrics 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 Albion Technology and Oxford Metrics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and Oxford Metrics plc, you can compare the effects of market volatilities on Albion Technology and Oxford Metrics 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 Albion Technology with a short position of Oxford Metrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Oxford Metrics.
Diversification Opportunities for Albion Technology and Oxford Metrics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albion and Oxford is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and Oxford Metrics plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Metrics plc and Albion Technology 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 Albion Technology General are associated (or correlated) with Oxford Metrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Metrics plc has no effect on the direction of Albion Technology i.e., Albion Technology and Oxford Metrics go up and down completely randomly.
Pair Corralation between Albion Technology and Oxford Metrics
Assuming the 90 days trading horizon Albion Technology General is expected to under-perform the Oxford Metrics. But the stock apears to be less risky and, when comparing its historical volatility, Albion Technology General is 1.71 times less risky than Oxford Metrics. The stock trades about -0.05 of its potential returns per unit of risk. The Oxford Metrics plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,940 in Oxford Metrics plc on September 4, 2024 and sell it today you would earn a total of 60.00 from holding Oxford Metrics plc or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Albion Technology General vs. Oxford Metrics plc
Performance |
| Timeline |
| Albion Technology General |
| Oxford Metrics plc |
Albion Technology and Oxford Metrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Oxford Metrics
The main advantage of trading using opposite Albion Technology and Oxford Metrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, Oxford Metrics 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 Oxford Metrics will offset losses from the drop in Oxford Metrics' long position.| Albion Technology vs. Griffin Mining | Albion Technology vs. Caledonia Mining | Albion Technology vs. Wyndham Hotels Resorts | Albion Technology vs. Eastinco Mining Exploration |
| Oxford Metrics vs. CVR Energy | Oxford Metrics vs. Viridian Therapeutics | Oxford Metrics vs. Nationwide Building Society | Oxford Metrics vs. Dollar Tree |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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