Correlation Between OptiCept Technologies and Bawat Water
Can any of the company-specific risk be diversified away by investing in both OptiCept Technologies and Bawat Water 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 OptiCept Technologies and Bawat Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OptiCept Technologies AB and Bawat Water Technologies, you can compare the effects of market volatilities on OptiCept Technologies and Bawat Water 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 OptiCept Technologies with a short position of Bawat Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of OptiCept Technologies and Bawat Water.
Diversification Opportunities for OptiCept Technologies and Bawat Water
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OptiCept and Bawat is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding OptiCept Technologies AB and Bawat Water Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bawat Water Technologies and OptiCept Technologies 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 OptiCept Technologies AB are associated (or correlated) with Bawat Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bawat Water Technologies has no effect on the direction of OptiCept Technologies i.e., OptiCept Technologies and Bawat Water go up and down completely randomly.
Pair Corralation between OptiCept Technologies and Bawat Water
Assuming the 90 days trading horizon OptiCept Technologies AB is expected to generate 0.21 times more return on investment than Bawat Water. However, OptiCept Technologies AB is 4.8 times less risky than Bawat Water. It trades about -0.1 of its potential returns per unit of risk. Bawat Water Technologies is currently generating about -0.11 per unit of risk. If you would invest 530.00 in OptiCept Technologies AB on September 1, 2024 and sell it today you would lose (25.00) from holding OptiCept Technologies AB or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OptiCept Technologies AB vs. Bawat Water Technologies
Performance |
| Timeline |
| OptiCept Technologies |
| Bawat Water Technologies |
OptiCept Technologies and Bawat Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OptiCept Technologies and Bawat Water
The main advantage of trading using opposite OptiCept Technologies and Bawat Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OptiCept Technologies position performs unexpectedly, Bawat Water 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 Bawat Water will offset losses from the drop in Bawat Water's long position.| OptiCept Technologies vs. AB SKF | OptiCept Technologies vs. Sandvik AB | OptiCept Technologies vs. Husqvarna AB | OptiCept Technologies vs. Skanska AB |
| Bawat Water vs. Qleanair Holding AB | Bawat Water vs. CirChem AB | Bawat Water vs. KABE Group AB | Bawat Water vs. IAR Systems Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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