Correlation Between OSRAM LICHT and Ceres Power
Can any of the company-specific risk be diversified away by investing in both OSRAM LICHT and Ceres Power 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 OSRAM LICHT and Ceres Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSRAM LICHT N and Ceres Power Holdings, you can compare the effects of market volatilities on OSRAM LICHT and Ceres Power 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 OSRAM LICHT with a short position of Ceres Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSRAM LICHT and Ceres Power.
Diversification Opportunities for OSRAM LICHT and Ceres Power
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OSRAM and Ceres is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding OSRAM LICHT N and Ceres Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Power Holdings and OSRAM LICHT 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 OSRAM LICHT N are associated (or correlated) with Ceres Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Power Holdings has no effect on the direction of OSRAM LICHT i.e., OSRAM LICHT and Ceres Power go up and down completely randomly.
Pair Corralation between OSRAM LICHT and Ceres Power
Assuming the 90 days trading horizon OSRAM LICHT N is expected to generate 0.05 times more return on investment than Ceres Power. However, OSRAM LICHT N is 18.56 times less risky than Ceres Power. It trades about 0.15 of its potential returns per unit of risk. Ceres Power Holdings is currently generating about -0.18 per unit of risk. If you would invest 5,120 in OSRAM LICHT N on September 3, 2024 and sell it today you would earn a total of 40.00 from holding OSRAM LICHT N or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSRAM LICHT N vs. Ceres Power Holdings
Performance |
| Timeline |
| OSRAM LICHT N |
| Ceres Power Holdings |
OSRAM LICHT and Ceres Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSRAM LICHT and Ceres Power
The main advantage of trading using opposite OSRAM LICHT and Ceres Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSRAM LICHT position performs unexpectedly, Ceres Power 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 Ceres Power will offset losses from the drop in Ceres Power's long position.| OSRAM LICHT vs. GEAR4MUSIC LS 10 | OSRAM LICHT vs. Warner Music Group | OSRAM LICHT vs. New Residential Investment | OSRAM LICHT vs. Zoom Video Communications |
| Ceres Power vs. ON SEMICONDUCTOR | Ceres Power vs. Taiwan Semiconductor Manufacturing | Ceres Power vs. Nordic Semiconductor ASA | Ceres Power vs. COPLAND ROAD CAPITAL |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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