Correlation Between Clean Seas and Odfjell Technology
Can any of the company-specific risk be diversified away by investing in both Clean Seas and Odfjell Technology 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 Clean Seas and Odfjell Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Seas Seafood and Odfjell Technology, you can compare the effects of market volatilities on Clean Seas and Odfjell Technology 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 Clean Seas with a short position of Odfjell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and Odfjell Technology.
Diversification Opportunities for Clean Seas and Odfjell Technology
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Clean and Odfjell is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and Odfjell Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odfjell Technology and Clean Seas 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 Clean Seas Seafood are associated (or correlated) with Odfjell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odfjell Technology has no effect on the direction of Clean Seas i.e., Clean Seas and Odfjell Technology go up and down completely randomly.
Pair Corralation between Clean Seas and Odfjell Technology
Assuming the 90 days trading horizon Clean Seas Seafood is expected to under-perform the Odfjell Technology. In addition to that, Clean Seas is 1.58 times more volatile than Odfjell Technology. It trades about -0.07 of its total potential returns per unit of risk. Odfjell Technology is currently generating about 0.03 per unit of volatility. If you would invest 3,978 in Odfjell Technology on September 1, 2024 and sell it today you would earn a total of 727.00 from holding Odfjell Technology or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Seas Seafood vs. Odfjell Technology
Performance |
| Timeline |
| Clean Seas Seafood |
| Odfjell Technology |
Clean Seas and Odfjell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Seas and Odfjell Technology
The main advantage of trading using opposite Clean Seas and Odfjell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Seas position performs unexpectedly, Odfjell Technology 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 Odfjell Technology will offset losses from the drop in Odfjell Technology's long position.| Clean Seas vs. Masoval AS | Clean Seas vs. Andfjord Salmon AS | Clean Seas vs. Arctic Fish Holding | Clean Seas vs. Ice Fish Farm |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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