Correlation Between Optical Cable and Ondas Holdings
Can any of the company-specific risk be diversified away by investing in both Optical Cable and Ondas Holdings 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 Optical Cable and Ondas Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optical Cable and Ondas Holdings, you can compare the effects of market volatilities on Optical Cable and Ondas Holdings 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 Optical Cable with a short position of Ondas Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optical Cable and Ondas Holdings.
Diversification Opportunities for Optical Cable and Ondas Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Optical and Ondas is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Optical Cable and Ondas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondas Holdings and Optical Cable 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 Optical Cable are associated (or correlated) with Ondas Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondas Holdings has no effect on the direction of Optical Cable i.e., Optical Cable and Ondas Holdings go up and down completely randomly.
Pair Corralation between Optical Cable and Ondas Holdings
Considering the 90-day investment horizon Optical Cable is expected to generate 153.8 times less return on investment than Ondas Holdings. But when comparing it to its historical volatility, Optical Cable is 2.54 times less risky than Ondas Holdings. It trades about 0.0 of its potential returns per unit of risk. Ondas Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Ondas Holdings on August 27, 2024 and sell it today you would lose (1.00) from holding Ondas Holdings or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optical Cable vs. Ondas Holdings
Performance |
| Timeline |
| Optical Cable |
| Ondas Holdings |
Optical Cable and Ondas Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optical Cable and Ondas Holdings
The main advantage of trading using opposite Optical Cable and Ondas Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optical Cable position performs unexpectedly, Ondas Holdings 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 Ondas Holdings will offset losses from the drop in Ondas Holdings' long position.| Optical Cable vs. KVH Industries | Optical Cable vs. Knowles Cor | Optical Cable vs. Comtech Telecommunications Corp | Optical Cable vs. Lantronix |
| Ondas Holdings vs. Mobilicom Limited Warrants | Ondas Holdings vs. Siyata Mobile | Ondas Holdings vs. SatixFy Communications | Ondas Holdings vs. Actelis Networks |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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