Correlation Between Optical Cable and Wegener
Can any of the company-specific risk be diversified away by investing in both Optical Cable and Wegener 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 Wegener into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optical Cable and Wegener, you can compare the effects of market volatilities on Optical Cable and Wegener 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 Wegener. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optical Cable and Wegener.
Diversification Opportunities for Optical Cable and Wegener
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Optical and Wegener is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Optical Cable and Wegener in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wegener 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 Wegener. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wegener has no effect on the direction of Optical Cable i.e., Optical Cable and Wegener go up and down completely randomly.
Pair Corralation between Optical Cable and Wegener
If you would invest 278.00 in Optical Cable on September 12, 2024 and sell it today you would lose (69.00) from holding Optical Cable or give up 24.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Optical Cable vs. Wegener
Performance |
| Timeline |
| Optical Cable |
| Wegener |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Optical Cable and Wegener Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optical Cable and Wegener
The main advantage of trading using opposite Optical Cable and Wegener positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optical Cable position performs unexpectedly, Wegener 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 Wegener will offset losses from the drop in Wegener's long position.| Optical Cable vs. KVH Industries | Optical Cable vs. Knowles Cor | Optical Cable vs. Comtech Telecommunications Corp | Optical Cable vs. Lantronix |
| Wegener vs. Knowles Cor | Wegener vs. Comtech Telecommunications Corp | Wegener vs. Mobilicom Limited Warrants | Wegener vs. Siyata Mobile |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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