Correlation Between OAKRIDGE INTERNATIONAL and HEXAGON AB
Can any of the company-specific risk be diversified away by investing in both OAKRIDGE INTERNATIONAL and HEXAGON AB 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 OAKRIDGE INTERNATIONAL and HEXAGON AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OAKRIDGE INTERNATIONAL and HEXAGON AB ADR1, you can compare the effects of market volatilities on OAKRIDGE INTERNATIONAL and HEXAGON AB 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 OAKRIDGE INTERNATIONAL with a short position of HEXAGON AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of OAKRIDGE INTERNATIONAL and HEXAGON AB.
Diversification Opportunities for OAKRIDGE INTERNATIONAL and HEXAGON AB
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OAKRIDGE and HEXAGON is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding OAKRIDGE INTERNATIONAL and HEXAGON AB ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXAGON AB ADR1 and OAKRIDGE INTERNATIONAL 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 OAKRIDGE INTERNATIONAL are associated (or correlated) with HEXAGON AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXAGON AB ADR1 has no effect on the direction of OAKRIDGE INTERNATIONAL i.e., OAKRIDGE INTERNATIONAL and HEXAGON AB go up and down completely randomly.
Pair Corralation between OAKRIDGE INTERNATIONAL and HEXAGON AB
Assuming the 90 days trading horizon OAKRIDGE INTERNATIONAL is expected to generate 5.56 times more return on investment than HEXAGON AB. However, OAKRIDGE INTERNATIONAL is 5.56 times more volatile than HEXAGON AB ADR1. It trades about 0.04 of its potential returns per unit of risk. HEXAGON AB ADR1 is currently generating about -0.08 per unit of risk. If you would invest 4.00 in OAKRIDGE INTERNATIONAL on September 3, 2024 and sell it today you would lose (0.85) from holding OAKRIDGE INTERNATIONAL or give up 21.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OAKRIDGE INTERNATIONAL vs. HEXAGON AB ADR1
Performance |
| Timeline |
| OAKRIDGE INTERNATIONAL |
| HEXAGON AB ADR1 |
OAKRIDGE INTERNATIONAL and HEXAGON AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OAKRIDGE INTERNATIONAL and HEXAGON AB
The main advantage of trading using opposite OAKRIDGE INTERNATIONAL and HEXAGON AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OAKRIDGE INTERNATIONAL position performs unexpectedly, HEXAGON AB 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 HEXAGON AB will offset losses from the drop in HEXAGON AB's long position.| OAKRIDGE INTERNATIONAL vs. United Airlines Holdings | OAKRIDGE INTERNATIONAL vs. Playtech plc | OAKRIDGE INTERNATIONAL vs. Singapore Airlines Limited | OAKRIDGE INTERNATIONAL vs. SINGAPORE AIRLINES |
| HEXAGON AB vs. Japan Post Insurance | HEXAGON AB vs. PARKEN Sport Entertainment | HEXAGON AB vs. Air Transport Services | HEXAGON AB vs. USWE SPORTS AB |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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