Correlation Between Odyssey Group and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both Odyssey Group and Abbott Laboratories 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 Odyssey Group and Abbott Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssey Group International and Abbott Laboratories, you can compare the effects of market volatilities on Odyssey Group and Abbott Laboratories 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 Odyssey Group with a short position of Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Group and Abbott Laboratories.
Diversification Opportunities for Odyssey Group and Abbott Laboratories
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Odyssey and Abbott is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Group International and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories and Odyssey Group 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 Odyssey Group International are associated (or correlated) with Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of Odyssey Group i.e., Odyssey Group and Abbott Laboratories go up and down completely randomly.
Pair Corralation between Odyssey Group and Abbott Laboratories
Given the investment horizon of 90 days Odyssey Group International is expected to generate 15.12 times more return on investment than Abbott Laboratories. However, Odyssey Group is 15.12 times more volatile than Abbott Laboratories. It trades about 0.27 of its potential returns per unit of risk. Abbott Laboratories is currently generating about -0.12 per unit of risk. If you would invest 1.60 in Odyssey Group International on September 13, 2024 and sell it today you would earn a total of 1.10 from holding Odyssey Group International or generate 68.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odyssey Group International vs. Abbott Laboratories
Performance |
| Timeline |
| Odyssey Group Intern |
| Abbott Laboratories |
Odyssey Group and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odyssey Group and Abbott Laboratories
The main advantage of trading using opposite Odyssey Group and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssey Group position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| Odyssey Group vs. Abbott Laboratories | Odyssey Group vs. Stryker | Odyssey Group vs. Boston Scientific Corp | Odyssey Group vs. Medtronic PLC |
| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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