Correlation Between Ocean Harvest and Associated British
Can any of the company-specific risk be diversified away by investing in both Ocean Harvest and Associated British 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 Associated British 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 Associated British Foods, you can compare the effects of market volatilities on Ocean Harvest and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Harvest and Associated British.
Diversification Opportunities for Ocean Harvest and Associated British
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ocean and Associated is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Harvest Technology and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of Ocean Harvest i.e., Ocean Harvest and Associated British go up and down completely randomly.
Pair Corralation between Ocean Harvest and Associated British
Assuming the 90 days trading horizon Ocean Harvest Technology is expected to generate 1.07 times more return on investment than Associated British. However, Ocean Harvest is 1.07 times more volatile than Associated British Foods. It trades about 0.09 of its potential returns per unit of risk. Associated British Foods is currently generating about -0.12 per unit of risk. If you would invest 850.00 in Ocean Harvest Technology on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Ocean Harvest Technology or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Harvest Technology vs. Associated British Foods
Performance |
| Timeline |
| Ocean Harvest Technology |
| Associated British Foods |
Ocean Harvest and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Harvest and Associated British
The main advantage of trading using opposite Ocean Harvest and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Harvest position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| Ocean Harvest vs. Liberty Media Corp | Ocean Harvest vs. Silvercorp Metals | Ocean Harvest vs. CNH Industrial NV | Ocean Harvest vs. Jacquet Metal Service |
| Associated British vs. InterContinental Hotels Group | Associated British vs. GreenX Metals | Associated British vs. National Beverage Corp | Associated British vs. Odfjell Drilling |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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