Correlation Between Tyson Foods and Oakley Capital

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

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

Diversification Opportunities for Tyson Foods and Oakley Capital

-0.59

Correlation Coefficient

Tyson Foods  Oakley Capital

Excellent diversification

The 3 months correlation between Tyson and Oakley is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods Cl 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 Tyson Foods 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 Tyson Foods Cl 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 Tyson Foods i.e., Tyson Foods and Oakley Capital go up and down completely randomly.

Pair Corralation between Tyson Foods and Oakley Capital

Assuming the 90 days trading horizon Tyson Foods Cl is expected to under-perform the Oakley Capital. But the stock apears to be less risky and, when comparing its historical volatility, Tyson Foods Cl is 1.76 times less risky than Oakley Capital. The stock trades about -0.51 of its potential returns per unit of risk. The Oakley Capital Investments is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  48,600  in Oakley Capital Investments on September 23, 2024 and sell it today you would earn a total of  1,000.00  from holding Oakley Capital Investments or generate 2.06% return on investment over 90 days.

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

Tyson Foods Cl  vs.  Oakley Capital Investments

Tyson Foods Cl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tyson Foods Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tyson Foods is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 Tyson Foods and Oakley Capital

The main advantage of trading using opposite Tyson Foods and Oakley Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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 Tyson Foods Cl 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.