Correlation Between Advanced Medical and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Ocean Harvest 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 Advanced Medical and Ocean Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Ocean Harvest Technology, you can compare the effects of market volatilities on Advanced Medical and Ocean Harvest 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 Advanced Medical with a short position of Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Ocean Harvest.
Diversification Opportunities for Advanced Medical and Ocean Harvest
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advanced and Ocean is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest Technology and Advanced Medical 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 Advanced Medical Solutions are associated (or correlated) with Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of Advanced Medical i.e., Advanced Medical and Ocean Harvest go up and down completely randomly.
Pair Corralation between Advanced Medical and Ocean Harvest
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to under-perform the Ocean Harvest. In addition to that, Advanced Medical is 2.26 times more volatile than Ocean Harvest Technology. It trades about -0.06 of its total potential returns per unit of risk. Ocean Harvest Technology is currently generating about 0.0 per unit of volatility. If you would invest 850.00 in Ocean Harvest Technology on September 19, 2024 and sell it today you would earn a total of 0.00 from holding Ocean Harvest Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Ocean Harvest Technology
Performance |
| Timeline |
| Advanced Medical Sol |
| Ocean Harvest Technology |
Advanced Medical and Ocean Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Ocean Harvest
The main advantage of trading using opposite Advanced Medical and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Ocean Harvest 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 Harvest will offset losses from the drop in Ocean Harvest's long position.| Advanced Medical vs. MTI Wireless Edge | Advanced Medical vs. Cairo Communication SpA | Advanced Medical vs. Ebro Foods | Advanced Medical vs. Team Internet Group |
| Ocean Harvest vs. Samsung Electronics Co | Ocean Harvest vs. Samsung Electronics Co | Ocean Harvest vs. Hyundai Motor | Ocean Harvest vs. Toyota Motor Corp |
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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