Correlation Between EPlay Digital and NORTHERN OCEAN

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

By analyzing existing cross correlation between ePlay Digital and NORTHERN OCEAN LTD, you can compare the effects of market volatilities on EPlay Digital and NORTHERN OCEAN 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 EPlay Digital with a short position of NORTHERN OCEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPlay Digital and NORTHERN OCEAN.

Diversification Opportunities for EPlay Digital and NORTHERN OCEAN

0.0

Correlation Coefficient

EPlay Digital  NORTHERN OCEAN

Pay attention - limited upside

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

Pair Corralation between EPlay Digital and NORTHERN OCEAN

If you would invest  56.00  in NORTHERN OCEAN LTD on September 3, 2024 and sell it today you would earn a total of  11.00  from holding NORTHERN OCEAN LTD or generate 19.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

ePlay Digital  vs.  NORTHERN OCEAN LTD

ePlay Digital

Risk-Adjusted Performance

0 of 100

Very Weak

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

NORTHERN OCEAN LTD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NORTHERN OCEAN LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, NORTHERN OCEAN reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EPlay Digital and NORTHERN OCEAN

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

The idea behind ePlay Digital and NORTHERN OCEAN LTD 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..