Correlation Between OptiCept Technologies and Investment
Can any of the company-specific risk be diversified away by investing in both OptiCept Technologies and Investment 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 Investment 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 Investment AB Oresund, you can compare the effects of market volatilities on OptiCept Technologies and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of OptiCept Technologies and Investment.
Diversification Opportunities for OptiCept Technologies and Investment
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OptiCept and Investment is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding OptiCept Technologies AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of OptiCept Technologies i.e., OptiCept Technologies and Investment go up and down completely randomly.
Pair Corralation between OptiCept Technologies and Investment
Assuming the 90 days trading horizon OptiCept Technologies AB is expected to under-perform the Investment. In addition to that, OptiCept Technologies is 1.4 times more volatile than Investment AB Oresund. It trades about -0.1 of its total potential returns per unit of risk. Investment AB Oresund is currently generating about -0.05 per unit of volatility. If you would invest 11,340 in Investment AB Oresund on September 1, 2024 and sell it today you would lose (180.00) from holding Investment AB Oresund or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OptiCept Technologies AB vs. Investment AB Oresund
Performance |
| Timeline |
| OptiCept Technologies |
| Investment AB Oresund |
OptiCept Technologies and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OptiCept Technologies and Investment
The main advantage of trading using opposite OptiCept Technologies and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OptiCept Technologies position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| OptiCept Technologies vs. AB SKF | OptiCept Technologies vs. Sandvik AB | OptiCept Technologies vs. Husqvarna AB | OptiCept Technologies vs. Skanska AB |
| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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