Correlation Between Otello ASA and ContextVision
Can any of the company-specific risk be diversified away by investing in both Otello ASA and ContextVision 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 Otello ASA and ContextVision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otello ASA and ContextVision AB, you can compare the effects of market volatilities on Otello ASA and ContextVision 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 Otello ASA with a short position of ContextVision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otello ASA and ContextVision.
Diversification Opportunities for Otello ASA and ContextVision
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Otello and ContextVision is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Otello ASA and ContextVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ContextVision AB and Otello ASA 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 ContextVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ContextVision AB has no effect on the direction of Otello ASA i.e., Otello ASA and ContextVision go up and down completely randomly.
Pair Corralation between Otello ASA and ContextVision
Assuming the 90 days trading horizon Otello ASA is expected to generate 0.78 times more return on investment than ContextVision. However, Otello ASA is 1.28 times less risky than ContextVision. It trades about 0.02 of its potential returns per unit of risk. ContextVision AB is currently generating about -0.04 per unit of risk. If you would invest 746.00 in Otello ASA on August 31, 2024 and sell it today you would earn a total of 34.00 from holding Otello ASA or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Otello ASA vs. ContextVision AB
Performance |
| Timeline |
| Otello ASA |
| ContextVision AB |
Otello ASA and ContextVision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otello ASA and ContextVision
The main advantage of trading using opposite Otello ASA and ContextVision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otello ASA position performs unexpectedly, ContextVision 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 ContextVision will offset losses from the drop in ContextVision's long position.| Otello ASA vs. Kid ASA | Otello ASA vs. Selvaag Bolig ASA | Otello ASA vs. Wallenius Wilhelmsen Logistics | Otello ASA vs. Elkem ASA |
| ContextVision vs. Carasent ASA | ContextVision vs. Kitron ASA | ContextVision vs. Arcticzymes Technologies ASA | ContextVision vs. Crayon Group Holding |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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