Correlation Between Odfjell Technology and Clean Seas
Can any of the company-specific risk be diversified away by investing in both Odfjell Technology and Clean Seas 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 Odfjell Technology and Clean Seas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Technology and Clean Seas Seafood, you can compare the effects of market volatilities on Odfjell Technology and Clean Seas 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 Odfjell Technology with a short position of Clean Seas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Technology and Clean Seas.
Diversification Opportunities for Odfjell Technology and Clean Seas
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Odfjell and Clean is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Technology and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood and Odfjell Technology 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 Odfjell Technology are associated (or correlated) with Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of Odfjell Technology i.e., Odfjell Technology and Clean Seas go up and down completely randomly.
Pair Corralation between Odfjell Technology and Clean Seas
Assuming the 90 days trading horizon Odfjell Technology is expected to generate 0.73 times more return on investment than Clean Seas. However, Odfjell Technology is 1.37 times less risky than Clean Seas. It trades about 0.06 of its potential returns per unit of risk. Clean Seas Seafood is currently generating about -0.05 per unit of risk. If you would invest 2,510 in Odfjell Technology on September 3, 2024 and sell it today you would earn a total of 2,195 from holding Odfjell Technology or generate 87.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odfjell Technology vs. Clean Seas Seafood
Performance |
| Timeline |
| Odfjell Technology |
| Clean Seas Seafood |
Odfjell Technology and Clean Seas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Technology and Clean Seas
The main advantage of trading using opposite Odfjell Technology and Clean Seas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Technology position performs unexpectedly, Clean Seas 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 Clean Seas will offset losses from the drop in Clean Seas' long position.| Odfjell Technology vs. NorAm Drilling AS | Odfjell Technology vs. Awilco Drilling PLC | Odfjell Technology vs. Bien Sparebank ASA | Odfjell Technology vs. Kraft Bank Asa |
| Clean Seas vs. Masoval AS | Clean Seas vs. Andfjord Salmon AS | Clean Seas vs. Arctic Fish Holding | Clean Seas vs. Ice Fish Farm |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |