Correlation Between Oakley Capital and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Oakley Capital and Arrow Electronics 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 Oakley Capital and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Arrow Electronics, you can compare the effects of market volatilities on Oakley Capital and Arrow Electronics 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 Oakley Capital with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Arrow Electronics.
Diversification Opportunities for Oakley Capital and Arrow Electronics
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oakley and Arrow is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and Oakley Capital 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 Oakley Capital Investments are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Oakley Capital i.e., Oakley Capital and Arrow Electronics go up and down completely randomly.
Pair Corralation between Oakley Capital and Arrow Electronics
Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.5 times more return on investment than Arrow Electronics. However, Oakley Capital Investments is 1.98 times less risky than Arrow Electronics. It trades about -0.01 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.02 per unit of risk. If you would invest 49,078 in Oakley Capital Investments on September 2, 2024 and sell it today you would lose (1,028) from holding Oakley Capital Investments or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Oakley Capital Investments vs. Arrow Electronics
Performance |
| Timeline |
| Oakley Capital Inves |
| Arrow Electronics |
Oakley Capital and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Arrow Electronics
The main advantage of trading using opposite Oakley Capital and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Oakley Capital vs. Toyota Motor Corp | Oakley Capital vs. SoftBank Group Corp | Oakley Capital vs. OTP Bank Nyrt | Oakley Capital vs. Las Vegas Sands |
| Arrow Electronics vs. Uniper SE | Arrow Electronics vs. Mulberry Group PLC | Arrow Electronics vs. London Security Plc | Arrow Electronics vs. Triad Group PLC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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