Correlation Between Oriental Culture and Boohoo PLC
Can any of the company-specific risk be diversified away by investing in both Oriental Culture and Boohoo PLC 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 Oriental Culture and Boohoo PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Culture Holding and BoohooCom PLC ADR, you can compare the effects of market volatilities on Oriental Culture and Boohoo PLC 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 Oriental Culture with a short position of Boohoo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Culture and Boohoo PLC.
Diversification Opportunities for Oriental Culture and Boohoo PLC
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oriental and Boohoo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Culture Holding and BoohooCom PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BoohooCom PLC ADR and Oriental Culture 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 Oriental Culture Holding are associated (or correlated) with Boohoo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BoohooCom PLC ADR has no effect on the direction of Oriental Culture i.e., Oriental Culture and Boohoo PLC go up and down completely randomly.
Pair Corralation between Oriental Culture and Boohoo PLC
Considering the 90-day investment horizon Oriental Culture Holding is expected to under-perform the Boohoo PLC. In addition to that, Oriental Culture is 2.26 times more volatile than BoohooCom PLC ADR. It trades about -0.01 of its total potential returns per unit of risk. BoohooCom PLC ADR is currently generating about 0.01 per unit of volatility. If you would invest 823.00 in BoohooCom PLC ADR on September 3, 2024 and sell it today you would lose (2.00) from holding BoohooCom PLC ADR or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Oriental Culture Holding vs. BoohooCom PLC ADR
Performance |
| Timeline |
| Oriental Culture Holding |
| BoohooCom PLC ADR |
Oriental Culture and Boohoo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Culture and Boohoo PLC
The main advantage of trading using opposite Oriental Culture and Boohoo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Culture position performs unexpectedly, Boohoo PLC 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 Boohoo PLC will offset losses from the drop in Boohoo PLC's long position.| Oriental Culture vs. Hour Loop | Oriental Culture vs. Jowell Global | Oriental Culture vs. Qurate Retail Series | Oriental Culture vs. Emerge Commerce |
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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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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