Correlation Between Octopus Aim and Technicolor
Can any of the company-specific risk be diversified away by investing in both Octopus Aim and Technicolor 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 Octopus Aim and Technicolor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Octopus Aim Vct and Technicolor, you can compare the effects of market volatilities on Octopus Aim and Technicolor 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 Octopus Aim with a short position of Technicolor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Octopus Aim and Technicolor.
Diversification Opportunities for Octopus Aim and Technicolor
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Octopus and Technicolor is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Octopus Aim Vct and Technicolor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technicolor and Octopus Aim 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 Octopus Aim Vct are associated (or correlated) with Technicolor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technicolor has no effect on the direction of Octopus Aim i.e., Octopus Aim and Technicolor go up and down completely randomly.
Pair Corralation between Octopus Aim and Technicolor
Assuming the 90 days trading horizon Octopus Aim Vct is expected to generate 0.15 times more return on investment than Technicolor. However, Octopus Aim Vct is 6.74 times less risky than Technicolor. It trades about -0.1 of its potential returns per unit of risk. Technicolor is currently generating about -0.11 per unit of risk. If you would invest 4,925 in Octopus Aim Vct on October 24, 2024 and sell it today you would lose (45.00) from holding Octopus Aim Vct or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Octopus Aim Vct vs. Technicolor
Performance |
| Timeline |
| Octopus Aim Vct |
| Technicolor |
Octopus Aim and Technicolor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Octopus Aim and Technicolor
The main advantage of trading using opposite Octopus Aim and Technicolor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Octopus Aim position performs unexpectedly, Technicolor 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 Technicolor will offset losses from the drop in Technicolor's long position.| Octopus Aim vs. Wheaton Precious Metals | Octopus Aim vs. Silvercorp Metals | Octopus Aim vs. Automatic Data Processing | Octopus Aim vs. Fidelity National Information |
| Technicolor vs. Mobius Investment Trust | Technicolor vs. SoftBank Group Corp | Technicolor vs. Livermore Investments Group | Technicolor vs. Commerzbank AG |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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