Correlation Between Olympic Circuit and Piotech

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

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

Diversification Opportunities for Olympic Circuit and Piotech

0.1

Correlation Coefficient

Olympic Circuit  Piotech

Average diversification

The 3 months correlation between Olympic and Piotech is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Circuit Technology and Piotech Inc A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piotech Inc A and Olympic Circuit 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 Olympic Circuit Technology are associated (or correlated) with Piotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piotech Inc A has no effect on the direction of Olympic Circuit i.e., Olympic Circuit and Piotech go up and down completely randomly.

Pair Corralation between Olympic Circuit and Piotech

Assuming the 90 days trading horizon Olympic Circuit Technology is expected to under-perform the Piotech. In addition to that, Olympic Circuit is 1.35 times more volatile than Piotech Inc A. It trades about -0.01 of its total potential returns per unit of risk. Piotech Inc A is currently generating about 0.0 per unit of volatility. If you would invest  16,038  in Piotech Inc A on December 30, 2024 and sell it today you would lose (309.00) from holding Piotech Inc A or give up 1.93% of portfolio value over 90 days.

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

Olympic Circuit Technology  vs.  Piotech Inc A

Olympic Circuit Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Olympic Circuit Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Olympic Circuit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Piotech Inc A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Piotech Inc A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Piotech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Olympic Circuit and Piotech

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

The idea behind Olympic Circuit Technology and Piotech Inc A 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.