Correlation Between Goodtech and Ocean Sun
Can any of the company-specific risk be diversified away by investing in both Goodtech and Ocean Sun 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 Goodtech and Ocean Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodtech and Ocean Sun As, you can compare the effects of market volatilities on Goodtech and Ocean Sun 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 Goodtech with a short position of Ocean Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodtech and Ocean Sun.
Diversification Opportunities for Goodtech and Ocean Sun
Very weak diversification
The 3 months correlation between Goodtech and Ocean is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Goodtech and Ocean Sun As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Sun As and Goodtech 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 Goodtech are associated (or correlated) with Ocean Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Sun As has no effect on the direction of Goodtech i.e., Goodtech and Ocean Sun go up and down completely randomly.
Pair Corralation between Goodtech and Ocean Sun
Assuming the 90 days trading horizon Goodtech is expected to generate 0.44 times more return on investment than Ocean Sun. However, Goodtech is 2.28 times less risky than Ocean Sun. It trades about 0.02 of its potential returns per unit of risk. Ocean Sun As is currently generating about -0.04 per unit of risk. If you would invest 992.00 in Goodtech on September 14, 2024 and sell it today you would earn a total of 28.00 from holding Goodtech or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Goodtech vs. Ocean Sun As
Performance |
| Timeline |
| Goodtech |
| Ocean Sun As |
Goodtech and Ocean Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodtech and Ocean Sun
The main advantage of trading using opposite Goodtech and Ocean Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodtech position performs unexpectedly, Ocean Sun 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 Sun will offset losses from the drop in Ocean Sun's long position.| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA | Goodtech vs. Arendals Fossekompani ASA |
| Ocean Sun vs. Grieg Seafood ASA | Ocean Sun vs. Techstep ASA | Ocean Sun vs. Goodtech | Ocean Sun vs. 5Th Planet Games |
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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