Correlation Between Optronics Technologies and Prodea Real
Can any of the company-specific risk be diversified away by investing in both Optronics Technologies and Prodea Real 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 Optronics Technologies and Prodea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optronics Technologies SA and Prodea Real Estate, you can compare the effects of market volatilities on Optronics Technologies and Prodea Real 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 Optronics Technologies with a short position of Prodea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optronics Technologies and Prodea Real.
Diversification Opportunities for Optronics Technologies and Prodea Real
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Optronics and Prodea is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Optronics Technologies SA and Prodea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodea Real Estate and Optronics 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 Optronics Technologies SA are associated (or correlated) with Prodea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodea Real Estate has no effect on the direction of Optronics Technologies i.e., Optronics Technologies and Prodea Real go up and down completely randomly.
Pair Corralation between Optronics Technologies and Prodea Real
Assuming the 90 days trading horizon Optronics Technologies SA is expected to generate 1.09 times more return on investment than Prodea Real. However, Optronics Technologies is 1.09 times more volatile than Prodea Real Estate. It trades about -0.01 of its potential returns per unit of risk. Prodea Real Estate is currently generating about -0.02 per unit of risk. If you would invest 187.00 in Optronics Technologies SA on September 3, 2024 and sell it today you would lose (39.00) from holding Optronics Technologies SA or give up 20.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 83.27% |
Values | Daily Returns |
Optronics Technologies SA vs. Prodea Real Estate
Performance |
Timeline |
Optronics Technologies |
Prodea Real Estate |
Optronics Technologies and Prodea Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Optronics Technologies and Prodea Real
The main advantage of trading using opposite Optronics Technologies and Prodea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optronics Technologies position performs unexpectedly, Prodea Real 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 Prodea Real will offset losses from the drop in Prodea Real's long position.Optronics Technologies vs. Technical Olympic SA | Optronics Technologies vs. Intertech SA Inter | Optronics Technologies vs. Foodlink AE | Optronics Technologies vs. General Commercial Industrial |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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