Correlation Between Spirent Communications and Oakley Capital
Can any of the company-specific risk be diversified away by investing in both Spirent Communications and Oakley Capital 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 Spirent Communications and Oakley Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and Oakley Capital Investments, you can compare the effects of market volatilities on Spirent Communications and Oakley Capital 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 Spirent Communications with a short position of Oakley Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and Oakley Capital.
Diversification Opportunities for Spirent Communications and Oakley Capital
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spirent and Oakley is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc and Oakley Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakley Capital Inves and Spirent Communications 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 Spirent Communications plc are associated (or correlated) with Oakley Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakley Capital Inves has no effect on the direction of Spirent Communications i.e., Spirent Communications and Oakley Capital go up and down completely randomly.
Pair Corralation between Spirent Communications and Oakley Capital
Assuming the 90 days trading horizon Spirent Communications plc is expected to generate 0.82 times more return on investment than Oakley Capital. However, Spirent Communications plc is 1.22 times less risky than Oakley Capital. It trades about 0.22 of its potential returns per unit of risk. Oakley Capital Investments is currently generating about 0.03 per unit of risk. If you would invest 17,030 in Spirent Communications plc on September 14, 2024 and sell it today you would earn a total of 900.00 from holding Spirent Communications plc or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. Oakley Capital Investments
Performance |
| Timeline |
| Spirent Communications |
| Oakley Capital Inves |
Spirent Communications and Oakley Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and Oakley Capital
The main advantage of trading using opposite Spirent Communications and Oakley Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications position performs unexpectedly, Oakley Capital 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 Oakley Capital will offset losses from the drop in Oakley Capital's long position.| Spirent Communications vs. National Atomic Co | Spirent Communications vs. Flutter Entertainment PLC | Spirent Communications vs. Camellia Plc | Spirent Communications vs. Marwyn Value Investors |
| Oakley Capital vs. Catalyst Media Group | Oakley Capital vs. CATLIN GROUP | Oakley Capital vs. Tamburi Investment Partners | Oakley Capital vs. Magnora 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |