Correlation Between Ocean Harvest and British American
Can any of the company-specific risk be diversified away by investing in both Ocean Harvest and British American 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 Ocean Harvest and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Harvest Technology and British American Tobacco, you can compare the effects of market volatilities on Ocean Harvest and British American 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 Ocean Harvest with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Harvest and British American.
Diversification Opportunities for Ocean Harvest and British American
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ocean and British is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Harvest Technology and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and Ocean Harvest 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 Ocean Harvest Technology are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Ocean Harvest i.e., Ocean Harvest and British American go up and down completely randomly.
Pair Corralation between Ocean Harvest and British American
Assuming the 90 days trading horizon Ocean Harvest Technology is expected to under-perform the British American. In addition to that, Ocean Harvest is 1.44 times more volatile than British American Tobacco. It trades about -0.03 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.02 per unit of volatility. If you would invest 3,400 in British American Tobacco on September 19, 2024 and sell it today you would earn a total of 347.00 from holding British American Tobacco or generate 10.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.57% |
| Values | Daily Returns |
Ocean Harvest Technology vs. British American Tobacco
Performance |
| Timeline |
| Ocean Harvest Technology |
| British American Tobacco |
Ocean Harvest and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Harvest and British American
The main advantage of trading using opposite Ocean Harvest and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Harvest position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Ocean Harvest vs. Samsung Electronics Co | Ocean Harvest vs. Samsung Electronics Co | Ocean Harvest vs. Hyundai Motor | Ocean Harvest vs. Toyota Motor Corp |
| British American vs. Ocean Harvest Technology | British American vs. Allianz Technology Trust | British American vs. Auction Technology Group | British American vs. Cognizant Technology Solutions |
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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