Correlation Between Ocean Biomedical and Globalfoundries
Can any of the company-specific risk be diversified away by investing in both Ocean Biomedical and Globalfoundries 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 Ocean Biomedical and Globalfoundries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Biomedical and Globalfoundries, you can compare the effects of market volatilities on Ocean Biomedical and Globalfoundries 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 Ocean Biomedical with a short position of Globalfoundries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Biomedical and Globalfoundries.
Diversification Opportunities for Ocean Biomedical and Globalfoundries
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ocean and Globalfoundries is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Biomedical and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries and Ocean Biomedical 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 Ocean Biomedical are associated (or correlated) with Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Ocean Biomedical i.e., Ocean Biomedical and Globalfoundries go up and down completely randomly.
Pair Corralation between Ocean Biomedical and Globalfoundries
Assuming the 90 days horizon Ocean Biomedical is expected to generate 10.45 times more return on investment than Globalfoundries. However, Ocean Biomedical is 10.45 times more volatile than Globalfoundries. It trades about 0.08 of its potential returns per unit of risk. Globalfoundries is currently generating about 0.0 per unit of risk. If you would invest 15.00 in Ocean Biomedical on September 14, 2024 and sell it today you would lose (11.56) from holding Ocean Biomedical or give up 77.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.2% |
| Values | Daily Returns |
Ocean Biomedical vs. Globalfoundries
Performance |
| Timeline |
| Ocean Biomedical |
| Globalfoundries |
Ocean Biomedical and Globalfoundries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Biomedical and Globalfoundries
The main advantage of trading using opposite Ocean Biomedical and Globalfoundries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Biomedical position performs unexpectedly, Globalfoundries 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 Globalfoundries will offset losses from the drop in Globalfoundries' long position.| Ocean Biomedical vs. Willamette Valley Vineyards | Ocean Biomedical vs. The Coca Cola | Ocean Biomedical vs. Ambev SA ADR | Ocean Biomedical vs. Griffon |
| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
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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