Correlation Between Oriental Precision and Settlebank

Can any of the company-specific risk be diversified away by investing in both Oriental Precision and Settlebank 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 Oriental Precision and Settlebank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oriental Precision Engineering and Settlebank, you can compare the effects of market volatilities on Oriental Precision and Settlebank 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 Oriental Precision with a short position of Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Precision and Settlebank.

Diversification Opportunities for Oriental Precision and Settlebank

0.0

Correlation Coefficient

Oriental Precision  Settlebank

Pay attention - limited upside

The 3 months correlation between Oriental and Settlebank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Precision Engineering and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank and Oriental Precision 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 Oriental Precision Engineering are associated (or correlated) with Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Oriental Precision i.e., Oriental Precision and Settlebank go up and down completely randomly.

Pair Corralation between Oriental Precision and Settlebank

If you would invest (100.00) in Oriental Precision Engineering on October 3, 2024 and sell it today you would earn a total of  100.00  from holding Oriental Precision Engineering or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Oriental Precision Engineering  vs.  Settlebank

Oriental Precision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oriental Precision Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Oriental Precision is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Settlebank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Settlebank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Oriental Precision and Settlebank

The main advantage of trading using opposite Oriental Precision and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Precision position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.

The idea behind Oriental Precision Engineering and Settlebank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.