Correlation Between Odfjell Technology and Goodtech
Can any of the company-specific risk be diversified away by investing in both Odfjell Technology and Goodtech 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 Goodtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Technology and Goodtech, you can compare the effects of market volatilities on Odfjell Technology and Goodtech 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 Goodtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Technology and Goodtech.
Diversification Opportunities for Odfjell Technology and Goodtech
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Odfjell and Goodtech is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Technology and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech 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 Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of Odfjell Technology i.e., Odfjell Technology and Goodtech go up and down completely randomly.
Pair Corralation between Odfjell Technology and Goodtech
Assuming the 90 days trading horizon Odfjell Technology is expected to generate 1.29 times more return on investment than Goodtech. However, Odfjell Technology is 1.29 times more volatile than Goodtech. It trades about 0.09 of its potential returns per unit of risk. Goodtech is currently generating about -0.01 per unit of risk. If you would invest 4,600 in Odfjell Technology on November 27, 2024 and sell it today you would earn a total of 500.00 from holding Odfjell Technology or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odfjell Technology vs. Goodtech
Performance |
| Timeline |
| Odfjell Technology |
| Goodtech |
Odfjell Technology and Goodtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Technology and Goodtech
The main advantage of trading using opposite Odfjell Technology and Goodtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Technology position performs unexpectedly, Goodtech 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 Goodtech will offset losses from the drop in Goodtech's long position.| Odfjell Technology vs. Pareto Bank ASA | Odfjell Technology vs. Austevoll Seafood ASA | Odfjell Technology vs. Kraft Bank Asa | Odfjell Technology vs. Sogn Sparebank |
| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Borgestad A | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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