Correlation Between OtelloASA and Roku
Can any of the company-specific risk be diversified away by investing in both OtelloASA and Roku 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 OtelloASA and Roku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otello ASA and Roku Inc, you can compare the effects of market volatilities on OtelloASA and Roku 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 OtelloASA with a short position of Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of OtelloASA and Roku.
Diversification Opportunities for OtelloASA and Roku
Very good diversification
The 3 months correlation between OtelloASA and Roku is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Otello ASA and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and OtelloASA 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 Otello ASA are associated (or correlated) with Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of OtelloASA i.e., OtelloASA and Roku go up and down completely randomly.
Pair Corralation between OtelloASA and Roku
Assuming the 90 days horizon Otello ASA is expected to under-perform the Roku. But the stock apears to be less risky and, when comparing its historical volatility, Otello ASA is 3.75 times less risky than Roku. The stock trades about -0.06 of its potential returns per unit of risk. The Roku Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,594 in Roku Inc on November 27, 2024 and sell it today you would earn a total of 843.00 from holding Roku Inc or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Otello ASA vs. Roku Inc
Performance |
| Timeline |
| Otello ASA |
| Roku Inc |
OtelloASA and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OtelloASA and Roku
The main advantage of trading using opposite OtelloASA and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OtelloASA position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.| OtelloASA vs. WT OFFSHORE | OtelloASA vs. Gruppo Mutuionline SpA | OtelloASA vs. PSI Software AG | OtelloASA vs. BW OFFSHORE LTD |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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