Correlation Between Oxford Technology and Beowulf Mining
Can any of the company-specific risk be diversified away by investing in both Oxford Technology and Beowulf Mining 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 Oxford Technology and Beowulf Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Technology 2 and Beowulf Mining, you can compare the effects of market volatilities on Oxford Technology and Beowulf Mining 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 Oxford Technology with a short position of Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Technology and Beowulf Mining.
Diversification Opportunities for Oxford Technology and Beowulf Mining
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Oxford and Beowulf is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Technology 2 and Beowulf Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining and Oxford 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 Oxford Technology 2 are associated (or correlated) with Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining has no effect on the direction of Oxford Technology i.e., Oxford Technology and Beowulf Mining go up and down completely randomly.
Pair Corralation between Oxford Technology and Beowulf Mining
Assuming the 90 days trading horizon Oxford Technology 2 is expected to generate 0.45 times more return on investment than Beowulf Mining. However, Oxford Technology 2 is 2.25 times less risky than Beowulf Mining. It trades about -0.13 of its potential returns per unit of risk. Beowulf Mining is currently generating about -0.07 per unit of risk. If you would invest 2,650 in Oxford Technology 2 on November 7, 2024 and sell it today you would lose (2,020) from holding Oxford Technology 2 or give up 76.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Technology 2 vs. Beowulf Mining
Performance |
| Timeline |
| Oxford Technology |
| Beowulf Mining |
Oxford Technology and Beowulf Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Technology and Beowulf Mining
The main advantage of trading using opposite Oxford Technology and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Technology position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining's long position.| Oxford Technology vs. LPKF Laser Electronics | Oxford Technology vs. Universal Display Corp | Oxford Technology vs. United Internet AG | Oxford Technology vs. Golden Metal Resources |
| Beowulf Mining vs. Automatic Data Processing | Beowulf Mining vs. Baker Steel Resources | Beowulf Mining vs. Iron Mountain | Beowulf Mining vs. Coor Service Management |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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