Correlation Between Oxford Technology and Empire Metals
Can any of the company-specific risk be diversified away by investing in both Oxford Technology and Empire Metals 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 Empire Metals 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 Empire Metals Limited, you can compare the effects of market volatilities on Oxford Technology and Empire Metals 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 Empire Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Technology and Empire Metals.
Diversification Opportunities for Oxford Technology and Empire Metals
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oxford and Empire is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Technology 2 and Empire Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Metals Limited 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 Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Limited has no effect on the direction of Oxford Technology i.e., Oxford Technology and Empire Metals go up and down completely randomly.
Pair Corralation between Oxford Technology and Empire Metals
Assuming the 90 days trading horizon Oxford Technology 2 is expected to under-perform the Empire Metals. But the stock apears to be less risky and, when comparing its historical volatility, Oxford Technology 2 is 2.94 times less risky than Empire Metals. The stock trades about -0.12 of its potential returns per unit of risk. The Empire Metals Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 183.00 in Empire Metals Limited on October 11, 2024 and sell it today you would earn a total of 577.00 from holding Empire Metals Limited or generate 315.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Technology 2 vs. Empire Metals Limited
Performance |
| Timeline |
| Oxford Technology |
| Empire Metals Limited |
Oxford Technology and Empire Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Technology and Empire Metals
The main advantage of trading using opposite Oxford Technology and Empire Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Technology position performs unexpectedly, Empire Metals 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 Empire Metals will offset losses from the drop in Empire Metals' long position.| Oxford Technology vs. alstria office REIT AG | Oxford Technology vs. Extra Space Storage | Oxford Technology vs. Rosslyn Data Technologies | Oxford Technology vs. Dairy Farm International |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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