Correlation Between OCEAN-GEOLOOP and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both OCEAN-GEOLOOP and CHINA EDUCATION 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 OCEAN-GEOLOOP and CHINA EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OCEAN GEOLOOP AS NK and CHINA EDUCATION GROUP, you can compare the effects of market volatilities on OCEAN-GEOLOOP and CHINA EDUCATION 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 OCEAN-GEOLOOP with a short position of CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of OCEAN-GEOLOOP and CHINA EDUCATION.
Diversification Opportunities for OCEAN-GEOLOOP and CHINA EDUCATION
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between OCEAN-GEOLOOP and CHINA is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding OCEAN GEOLOOP AS NK and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP and OCEAN-GEOLOOP 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 OCEAN GEOLOOP AS NK are associated (or correlated) with CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of OCEAN-GEOLOOP i.e., OCEAN-GEOLOOP and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between OCEAN-GEOLOOP and CHINA EDUCATION
Assuming the 90 days horizon OCEAN GEOLOOP AS NK is expected to generate 1.6 times more return on investment than CHINA EDUCATION. However, OCEAN-GEOLOOP is 1.6 times more volatile than CHINA EDUCATION GROUP. It trades about 0.09 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.21 per unit of risk. If you would invest 34.00 in OCEAN GEOLOOP AS NK on November 29, 2024 and sell it today you would earn a total of 3.00 from holding OCEAN GEOLOOP AS NK or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OCEAN GEOLOOP AS NK vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| OCEAN GEOLOOP AS |
| CHINA EDUCATION GROUP |
OCEAN-GEOLOOP and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OCEAN-GEOLOOP and CHINA EDUCATION
The main advantage of trading using opposite OCEAN-GEOLOOP and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OCEAN-GEOLOOP position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| OCEAN-GEOLOOP vs. ECHO INVESTMENT ZY | OCEAN-GEOLOOP vs. ASM Pacific Technology | OCEAN-GEOLOOP vs. PennantPark Investment | OCEAN-GEOLOOP vs. PKSHA TECHNOLOGY INC |
| CHINA EDUCATION vs. PRINCIPAL FINANCIAL | CHINA EDUCATION vs. Discover Financial Services | CHINA EDUCATION vs. China Foods Limited | CHINA EDUCATION vs. Direct Line Insurance |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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