Correlation Between European Metals and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and Ocean Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Ocean Harvest Technology, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Ocean Harvest.
Diversification Opportunities for European Metals and Ocean Harvest
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between European and Ocean is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings 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 European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and Ocean Harvest go up and down completely randomly.
Pair Corralation between European Metals and Ocean Harvest
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Ocean Harvest. In addition to that, European Metals is 1.08 times more volatile than Ocean Harvest Technology. It trades about -0.07 of its total potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.03 per unit of volatility. If you would invest 1,713 in Ocean Harvest Technology on September 2, 2024 and sell it today you would lose (838.00) from holding Ocean Harvest Technology or give up 48.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.37% |
| Values | Daily Returns |
European Metals Holdings vs. Ocean Harvest Technology
Performance |
| Timeline |
| European Metals Holdings |
| Ocean Harvest Technology |
European Metals and Ocean Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Ocean Harvest
The main advantage of trading using opposite European Metals and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.| European Metals vs. Gaztransport et Technigaz | European Metals vs. Charter Communications Cl | European Metals vs. Telecom Italia SpA | European Metals vs. Public Storage |
| Ocean Harvest vs. GoldMining | Ocean Harvest vs. Invesco Physical Silver | Ocean Harvest vs. Westlake Chemical Corp | Ocean Harvest vs. Games Workshop Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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