Correlation Between Optivision Technology and Episil Holding

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

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

Diversification Opportunities for Optivision Technology and Episil Holding

0.25

Correlation Coefficient

Optivision Technology  Episil Holding

Modest diversification

The 3 months correlation between Optivision and Episil is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Optivision Technology and Episil Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Episil Holding and Optivision Technology 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 Optivision Technology are associated (or correlated) with Episil Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Episil Holding has no effect on the direction of Optivision Technology i.e., Optivision Technology and Episil Holding go up and down completely randomly.

Pair Corralation between Optivision Technology and Episil Holding

Assuming the 90 days trading horizon Optivision Technology is expected to generate 0.57 times more return on investment than Episil Holding. However, Optivision Technology is 1.75 times less risky than Episil Holding. It trades about 0.14 of its potential returns per unit of risk. Episil Holding is currently generating about -0.03 per unit of risk. If you would invest  3,020  in Optivision Technology on December 25, 2024 and sell it today you would earn a total of  345.00  from holding Optivision Technology or generate 11.42% return on investment over 90 days.

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

Optivision Technology  vs.  Episil Holding

Optivision Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Optivision Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Optivision Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Episil Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Episil Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Episil Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Optivision Technology and Episil Holding

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

The idea behind Optivision Technology and Episil Holding 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.