Correlation Between Big Tree and ODDITY Tech
Can any of the company-specific risk be diversified away by investing in both Big Tree and ODDITY Tech 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 Big Tree and ODDITY Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Tree Cloud and ODDITY Tech Ltd, you can compare the effects of market volatilities on Big Tree and ODDITY Tech 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 Big Tree with a short position of ODDITY Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Tree and ODDITY Tech.
Diversification Opportunities for Big Tree and ODDITY Tech
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Big and ODDITY is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Big Tree Cloud and ODDITY Tech Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODDITY Tech and Big Tree 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 Big Tree Cloud are associated (or correlated) with ODDITY Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODDITY Tech has no effect on the direction of Big Tree i.e., Big Tree and ODDITY Tech go up and down completely randomly.
Pair Corralation between Big Tree and ODDITY Tech
Considering the 90-day investment horizon Big Tree Cloud is expected to under-perform the ODDITY Tech. In addition to that, Big Tree is 2.34 times more volatile than ODDITY Tech Ltd. It trades about -0.25 of its total potential returns per unit of risk. ODDITY Tech Ltd is currently generating about 0.13 per unit of volatility. If you would invest 3,901 in ODDITY Tech Ltd on August 24, 2024 and sell it today you would earn a total of 411.00 from holding ODDITY Tech Ltd or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Big Tree Cloud vs. ODDITY Tech Ltd
Performance |
| Timeline |
| Big Tree Cloud |
| ODDITY Tech |
Big Tree and ODDITY Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Tree and ODDITY Tech
The main advantage of trading using opposite Big Tree and ODDITY Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Tree position performs unexpectedly, ODDITY Tech 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 ODDITY Tech will offset losses from the drop in ODDITY Tech's long position.The idea behind Big Tree Cloud and ODDITY Tech Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ODDITY Tech vs. SentinelOne | ODDITY Tech vs. BlackBerry | ODDITY Tech vs. Global Blue Group | ODDITY Tech vs. Aurora Mobile |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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