Correlation Between Oceanic Beverages and Pontex Polyblend

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

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

Diversification Opportunities for Oceanic Beverages and Pontex Polyblend

-0.09

Correlation Coefficient

Oceanic Beverages  Pontex Polyblend

Good diversification

The 3 months correlation between Oceanic and Pontex is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Oceanic Beverages Co and Pontex Polyblend CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontex Polyblend CoLtd and Oceanic Beverages 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 Oceanic Beverages Co are associated (or correlated) with Pontex Polyblend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontex Polyblend CoLtd has no effect on the direction of Oceanic Beverages i.e., Oceanic Beverages and Pontex Polyblend go up and down completely randomly.

Pair Corralation between Oceanic Beverages and Pontex Polyblend

Assuming the 90 days trading horizon Oceanic Beverages Co is expected to generate 0.94 times more return on investment than Pontex Polyblend. However, Oceanic Beverages Co is 1.06 times less risky than Pontex Polyblend. It trades about -0.06 of its potential returns per unit of risk. Pontex Polyblend CoLtd is currently generating about -0.12 per unit of risk. If you would invest  1,560  in Oceanic Beverages Co on December 29, 2024 and sell it today you would lose (160.00) from holding Oceanic Beverages Co or give up 10.26% of portfolio value over 90 days.

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

Oceanic Beverages Co  vs.  Pontex Polyblend CoLtd

Oceanic Beverages

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oceanic Beverages Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pontex Polyblend CoLtd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pontex Polyblend CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Oceanic Beverages and Pontex Polyblend

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

The idea behind Oceanic Beverages Co and Pontex Polyblend CoLtd 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.