Correlation Between Seaboard and Ontex Group
Can any of the company-specific risk be diversified away by investing in both Seaboard and Ontex Group 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 Seaboard and Ontex Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seaboard and Ontex Group NV, you can compare the effects of market volatilities on Seaboard and Ontex Group 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 Seaboard with a short position of Ontex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seaboard and Ontex Group.
Diversification Opportunities for Seaboard and Ontex Group
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Seaboard and Ontex is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group NV and Seaboard 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 Seaboard are associated (or correlated) with Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of Seaboard i.e., Seaboard and Ontex Group go up and down completely randomly.
Pair Corralation between Seaboard and Ontex Group
Assuming the 90 days horizon Seaboard is expected to under-perform the Ontex Group. In addition to that, Seaboard is 1.44 times more volatile than Ontex Group NV. It trades about -0.21 of its total potential returns per unit of risk. Ontex Group NV is currently generating about 0.15 per unit of volatility. If you would invest 766.00 in Ontex Group NV on August 30, 2024 and sell it today you would earn a total of 31.00 from holding Ontex Group NV or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Seaboard vs. Ontex Group NV
Performance |
| Timeline |
| Seaboard |
| Ontex Group NV |
Seaboard and Ontex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seaboard and Ontex Group
The main advantage of trading using opposite Seaboard and Ontex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seaboard position performs unexpectedly, Ontex Group 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 Ontex Group will offset losses from the drop in Ontex Group's long position.| Seaboard vs. Honeywell International | Seaboard vs. Mitsubishi | Seaboard vs. Superior Plus Corp | Seaboard vs. NMI Holdings |
| Ontex Group vs. LOral SA | Ontex Group vs. Superior Plus Corp | Ontex Group vs. NMI Holdings | Ontex Group vs. Origin Agritech |
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 Stocks Directory module to find actively traded stocks across global markets.
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