Correlation Between Oakridge International and CSL
Can any of the company-specific risk be diversified away by investing in both Oakridge International and CSL 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 Oakridge International and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakridge International and CSL, you can compare the effects of market volatilities on Oakridge International and CSL 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 Oakridge International with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakridge International and CSL.
Diversification Opportunities for Oakridge International and CSL
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oakridge and CSL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Oakridge International and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Oakridge International 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 Oakridge International are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Oakridge International i.e., Oakridge International and CSL go up and down completely randomly.
Pair Corralation between Oakridge International and CSL
Assuming the 90 days trading horizon Oakridge International is expected to generate 3.8 times more return on investment than CSL. However, Oakridge International is 3.8 times more volatile than CSL. It trades about 0.0 of its potential returns per unit of risk. CSL is currently generating about -0.11 per unit of risk. If you would invest 6.00 in Oakridge International on September 13, 2024 and sell it today you would lose (0.10) from holding Oakridge International or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakridge International vs. CSL
Performance |
| Timeline |
| Oakridge International |
| CSL |
Oakridge International and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakridge International and CSL
The main advantage of trading using opposite Oakridge International and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakridge International position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Oakridge International vs. K2 Asset Management | Oakridge International vs. BTC Health Limited | Oakridge International vs. Platinum Asset Management | Oakridge International vs. Global Health |
| CSL vs. Charter Hall Education | CSL vs. Ainsworth Game Technology | CSL vs. Advanced Braking Technology | CSL vs. Pinnacle Investment Management |
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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