Correlation Between Oriental Culture and Natural Health
Can any of the company-specific risk be diversified away by investing in both Oriental Culture and Natural Health 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 Natural Health 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 Natural Health Trend, you can compare the effects of market volatilities on Oriental Culture and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Culture and Natural Health.
Diversification Opportunities for Oriental Culture and Natural Health
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oriental and Natural is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Culture Holding and Natural Health Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trend 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trend has no effect on the direction of Oriental Culture i.e., Oriental Culture and Natural Health go up and down completely randomly.
Pair Corralation between Oriental Culture and Natural Health
Considering the 90-day investment horizon Oriental Culture Holding is expected to generate 0.92 times more return on investment than Natural Health. However, Oriental Culture Holding is 1.08 times less risky than Natural Health. It trades about 0.21 of its potential returns per unit of risk. Natural Health Trend is currently generating about -0.06 per unit of risk. If you would invest 122.00 in Oriental Culture Holding on November 27, 2024 and sell it today you would earn a total of 16.30 from holding Oriental Culture Holding or generate 13.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Oriental Culture Holding vs. Natural Health Trend
Performance |
Timeline |
Oriental Culture Holding |
Natural Health Trend |
Oriental Culture and Natural Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oriental Culture and Natural Health
The main advantage of trading using opposite Oriental Culture and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Culture position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.Oriental Culture vs. Hour Loop | ||
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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 Stocks Directory module to find actively traded stocks across global markets.
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