Correlation Between Oak Woods and Curtiss Motorcycles
Can any of the company-specific risk be diversified away by investing in both Oak Woods and Curtiss Motorcycles 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 Oak Woods and Curtiss Motorcycles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Woods Acquisition and Curtiss Motorcycles, you can compare the effects of market volatilities on Oak Woods and Curtiss Motorcycles 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 Oak Woods with a short position of Curtiss Motorcycles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Woods and Curtiss Motorcycles.
Diversification Opportunities for Oak Woods and Curtiss Motorcycles
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oak and Curtiss is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and Curtiss Motorcycles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Motorcycles and Oak Woods 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 Oak Woods Acquisition are associated (or correlated) with Curtiss Motorcycles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Motorcycles has no effect on the direction of Oak Woods i.e., Oak Woods and Curtiss Motorcycles go up and down completely randomly.
Pair Corralation between Oak Woods and Curtiss Motorcycles
Given the investment horizon of 90 days Oak Woods Acquisition is expected to generate 0.01 times more return on investment than Curtiss Motorcycles. However, Oak Woods Acquisition is 91.95 times less risky than Curtiss Motorcycles. It trades about 0.46 of its potential returns per unit of risk. Curtiss Motorcycles is currently generating about -0.07 per unit of risk. If you would invest 1,117 in Oak Woods Acquisition on August 28, 2024 and sell it today you would earn a total of 19.00 from holding Oak Woods Acquisition or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oak Woods Acquisition vs. Curtiss Motorcycles
Performance |
| Timeline |
| Oak Woods Acquisition |
| Curtiss Motorcycles |
Oak Woods and Curtiss Motorcycles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Woods and Curtiss Motorcycles
The main advantage of trading using opposite Oak Woods and Curtiss Motorcycles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods position performs unexpectedly, Curtiss Motorcycles 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 Curtiss Motorcycles will offset losses from the drop in Curtiss Motorcycles' long position.| Oak Woods vs. Grocery Outlet Holding | Oak Woods vs. FitLife Brands, Common | Oak Woods vs. Radcom | Oak Woods vs. Tyson Foods |
| Curtiss Motorcycles vs. Life Electric Vehicles | Curtiss Motorcycles vs. Evil Empire Designs | Curtiss Motorcycles vs. Twin Vee Powercats | Curtiss Motorcycles vs. LCI Industries |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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