Correlation Between American Hotel and Ocumetics Technology
Can any of the company-specific risk be diversified away by investing in both American Hotel and Ocumetics Technology 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 American Hotel and Ocumetics Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Ocumetics Technology Corp, you can compare the effects of market volatilities on American Hotel and Ocumetics Technology 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 American Hotel with a short position of Ocumetics Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Ocumetics Technology.
Diversification Opportunities for American Hotel and Ocumetics Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Ocumetics is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Ocumetics Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocumetics Technology Corp and American Hotel 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 American Hotel Income are associated (or correlated) with Ocumetics Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocumetics Technology Corp has no effect on the direction of American Hotel i.e., American Hotel and Ocumetics Technology go up and down completely randomly.
Pair Corralation between American Hotel and Ocumetics Technology
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the Ocumetics Technology. In addition to that, American Hotel is 1.11 times more volatile than Ocumetics Technology Corp. It trades about -0.04 of its total potential returns per unit of risk. Ocumetics Technology Corp is currently generating about 0.01 per unit of volatility. If you would invest 42.00 in Ocumetics Technology Corp on September 4, 2024 and sell it today you would lose (12.00) from holding Ocumetics Technology Corp or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.73% |
| Values | Daily Returns |
American Hotel Income vs. Ocumetics Technology Corp
Performance |
| Timeline |
| American Hotel Income |
| Ocumetics Technology Corp |
American Hotel and Ocumetics Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Ocumetics Technology
The main advantage of trading using opposite American Hotel and Ocumetics Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, Ocumetics Technology 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 Ocumetics Technology will offset losses from the drop in Ocumetics Technology's long position.| American Hotel vs. Brookfield Office Properties | American Hotel vs. Summa Silver Corp | American Hotel vs. Leons Furniture Limited | American Hotel vs. TGS Esports |
| Ocumetics Technology vs. Sirona Biochem Corp | Ocumetics Technology vs. Rakovina Therapeutics | Ocumetics Technology vs. Water Ways Technologies | Ocumetics Technology vs. Perimeter Medical Imaging |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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