Correlation Between Futura Medical and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both Futura 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 Futura 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 Futura Medical and Ocean Harvest Technology, you can compare the effects of market volatilities on Futura 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 Futura Medical with a short position of Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futura Medical and Ocean Harvest.
Diversification Opportunities for Futura Medical and Ocean Harvest
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Futura and Ocean is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Futura Medical 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 Futura 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 Futura Medical 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 Futura Medical i.e., Futura Medical and Ocean Harvest go up and down completely randomly.
Pair Corralation between Futura Medical and Ocean Harvest
Assuming the 90 days trading horizon Futura Medical is expected to generate 1.22 times more return on investment than Ocean Harvest. However, Futura Medical is 1.22 times more volatile than Ocean Harvest Technology. It trades about 0.0 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.03 per unit of risk. If you would invest 4,470 in Futura Medical on August 24, 2024 and sell it today you would lose (1,175) from holding Futura Medical or give up 26.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.76% |
| Values | Daily Returns |
Futura Medical vs. Ocean Harvest Technology
Performance |
| Timeline |
| Futura Medical |
| Ocean Harvest Technology |
Futura Medical and Ocean Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futura Medical and Ocean Harvest
The main advantage of trading using opposite Futura Medical and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futura 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.| Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Hyundai Motor | Futura Medical vs. Toyota Motor Corp |
| Ocean Harvest vs. Invesco Physical Silver | Ocean Harvest vs. Futura Medical | Ocean Harvest vs. CompuGroup Medical AG | Ocean Harvest vs. Solstad Offshore ASA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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