Correlation Between Ametek and Oakley Capital

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

By analyzing existing cross correlation between Ametek Inc and Oakley Capital Investments, you can compare the effects of market volatilities on Ametek 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 Ametek with a short position of Oakley Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ametek and Oakley Capital.

Diversification Opportunities for Ametek and Oakley Capital

-0.56

Correlation Coefficient

Ametek  Oakley Capital

Excellent diversification

The 3 months correlation between Ametek and Oakley is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc 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 Ametek 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 Ametek Inc 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 Ametek i.e., Ametek and Oakley Capital go up and down completely randomly.

Pair Corralation between Ametek and Oakley Capital

Assuming the 90 days trading horizon Ametek Inc is expected to under-perform the Oakley Capital. But the stock apears to be less risky and, when comparing its historical volatility, Ametek Inc is 1.84 times less risky than Oakley Capital. The stock trades about -0.43 of its potential returns per unit of risk. The Oakley Capital Investments is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  48,950  in Oakley Capital Investments on September 24, 2024 and sell it today you would earn a total of  650.00  from holding Oakley Capital Investments or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ametek Inc  vs.  Oakley Capital Investments

Ametek Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ametek Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Ametek may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oakley Capital Inves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oakley Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oakley Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ametek and Oakley Capital

The main advantage of trading using opposite Ametek and Oakley Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ametek 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.

The idea behind Ametek Inc and Oakley Capital Investments 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.