Correlation Between Oriental Culture and Natural Health

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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

OrientalNaturalDiversified AwayOrientalNaturalDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Oriental Culture Holding  vs.  Natural Health Trend

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-1001020
JavaScript chart by amCharts 3.21.15OCG NHTC
       Timeline  
Oriental Culture Holding 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Culture Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Oriental Culture reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.11.21.31.41.51.61.71.81.9
Natural Health Trend 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Natural Health Trend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb44.555.5

Oriental Culture and Natural Health Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-19.82-14.84-9.87-4.890.04.9210.0215.1120.2125.3 0.010.020.030.04
JavaScript chart by amCharts 3.21.15OCG NHTC
       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.
The idea behind Oriental Culture Holding and Natural Health Trend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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