Correlation Between OCI NV and Sligro Food
Can any of the company-specific risk be diversified away by investing in both OCI NV and Sligro Food 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 OCI NV and Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OCI NV and Sligro Food Group, you can compare the effects of market volatilities on OCI NV and Sligro Food 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 OCI NV with a short position of Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of OCI NV and Sligro Food.
Diversification Opportunities for OCI NV and Sligro Food
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OCI and Sligro is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding OCI NV and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and OCI NV 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 OCI NV are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of OCI NV i.e., OCI NV and Sligro Food go up and down completely randomly.
Pair Corralation between OCI NV and Sligro Food
Assuming the 90 days trading horizon OCI NV is expected to generate 1.85 times more return on investment than Sligro Food. However, OCI NV is 1.85 times more volatile than Sligro Food Group. It trades about 0.0 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.05 per unit of risk. If you would invest 1,378 in OCI NV on August 29, 2024 and sell it today you would lose (254.00) from holding OCI NV or give up 18.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OCI NV vs. Sligro Food Group
Performance |
| Timeline |
| OCI NV |
| Sligro Food Group |
OCI NV and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OCI NV and Sligro Food
The main advantage of trading using opposite OCI NV and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OCI NV position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| OCI NV vs. AMG Advanced Metallurgical | OCI NV vs. NN Group NV | OCI NV vs. Koninklijke Vopak NV | OCI NV vs. BE Semiconductor Industries |
| Sligro Food vs. Unilever PLC | Sligro Food vs. Koninklijke Philips NV | Sligro Food vs. NN Group NV | Sligro Food vs. ING Groep NV |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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