Correlation Between Adventure Box and OptiCept Technologies

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

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

Diversification Opportunities for Adventure Box and OptiCept Technologies

0.6

Correlation Coefficient

Adventure Box  OptiCept Technologies

Poor diversification

The 3 months correlation between Adventure and OptiCept is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Adventure Box Technology and OptiCept Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiCept Technologies and Adventure Box 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 Adventure Box Technology are associated (or correlated) with OptiCept Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiCept Technologies has no effect on the direction of Adventure Box i.e., Adventure Box and OptiCept Technologies go up and down completely randomly.

Pair Corralation between Adventure Box and OptiCept Technologies

Assuming the 90 days trading horizon Adventure Box Technology is expected to under-perform the OptiCept Technologies. In addition to that, Adventure Box is 2.66 times more volatile than OptiCept Technologies AB. It trades about -0.25 of its total potential returns per unit of risk. OptiCept Technologies AB is currently generating about -0.4 per unit of volatility. If you would invest  527.00  in OptiCept Technologies AB on October 11, 2024 and sell it today you would lose (59.00) from holding OptiCept Technologies AB or give up 11.2% of portfolio value over 90 days.

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

Adventure Box Technology  vs.  OptiCept Technologies AB

Adventure Box Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adventure Box Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

OptiCept Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OptiCept Technologies AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Adventure Box and OptiCept Technologies

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

The idea behind Adventure Box Technology and OptiCept Technologies AB 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.