Correlation Between Vieworks and Oscotec

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

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

Diversification Opportunities for Vieworks and Oscotec

0.61

Correlation Coefficient

Vieworks  Oscotec

Poor diversification

The 3 months correlation between Vieworks and Oscotec is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vieworks Co and Oscotec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oscotec and Vieworks 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 Vieworks Co are associated (or correlated) with Oscotec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oscotec has no effect on the direction of Vieworks i.e., Vieworks and Oscotec go up and down completely randomly.

Pair Corralation between Vieworks and Oscotec

Assuming the 90 days trading horizon Vieworks is expected to generate 2.12 times less return on investment than Oscotec. But when comparing it to its historical volatility, Vieworks Co is 2.42 times less risky than Oscotec. It trades about 0.18 of its potential returns per unit of risk. Oscotec is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,365,000  in Oscotec on December 26, 2024 and sell it today you would earn a total of  760,000  from holding Oscotec or generate 32.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Vieworks Co  vs.  Oscotec

Vieworks

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vieworks Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vieworks sustained solid returns over the last few months and may actually be approaching a breakup point.

Oscotec

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oscotec are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oscotec sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vieworks and Oscotec

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

The idea behind Vieworks Co and Oscotec 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.