Correlation Between Young Cos and Oxford Metrics
Can any of the company-specific risk be diversified away by investing in both Young Cos and Oxford Metrics 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 Young Cos and Oxford Metrics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Oxford Metrics plc, you can compare the effects of market volatilities on Young Cos and Oxford Metrics 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 Young Cos with a short position of Oxford Metrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Oxford Metrics.
Diversification Opportunities for Young Cos and Oxford Metrics
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Young and Oxford is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery and Oxford Metrics plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Metrics plc and Young Cos 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 Young Cos Brewery are associated (or correlated) with Oxford Metrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Metrics plc has no effect on the direction of Young Cos i.e., Young Cos and Oxford Metrics go up and down completely randomly.
Pair Corralation between Young Cos and Oxford Metrics
Assuming the 90 days trading horizon Young Cos Brewery is expected to generate 0.62 times more return on investment than Oxford Metrics. However, Young Cos Brewery is 1.63 times less risky than Oxford Metrics. It trades about 0.04 of its potential returns per unit of risk. Oxford Metrics plc is currently generating about -0.14 per unit of risk. If you would invest 60,404 in Young Cos Brewery on September 13, 2024 and sell it today you would earn a total of 3,996 from holding Young Cos Brewery or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Young Cos Brewery vs. Oxford Metrics plc
Performance |
| Timeline |
| Young Cos Brewery |
| Oxford Metrics plc |
Young Cos and Oxford Metrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Oxford Metrics
The main advantage of trading using opposite Young Cos and Oxford Metrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos position performs unexpectedly, Oxford Metrics 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 Oxford Metrics will offset losses from the drop in Oxford Metrics' long position.| Young Cos vs. Berkshire Hathaway | Young Cos vs. Hyundai Motor | Young Cos vs. Samsung Electronics Co | Young Cos vs. Samsung Electronics Co |
| Oxford Metrics vs. Lloyds Banking Group | Oxford Metrics vs. Applied Materials | Oxford Metrics vs. Martin Marietta Materials | Oxford Metrics vs. Edita Food Industries |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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