Correlation Between EMagin and Ouster

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

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

Diversification Opportunities for EMagin and Ouster

0.56

Correlation Coefficient

EMagin  Ouster

Very weak diversification

The 3 months correlation between EMagin and Ouster is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding EMagin and Ouster Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ouster Inc and EMagin 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 EMagin are associated (or correlated) with Ouster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ouster Inc has no effect on the direction of EMagin i.e., EMagin and Ouster go up and down completely randomly.

Pair Corralation between EMagin and Ouster

If you would invest  878.00  in Ouster Inc on September 17, 2024 and sell it today you would earn a total of  30.00  from holding Ouster Inc or generate 3.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

EMagin  vs.  Ouster Inc

EMagin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EMagin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EMagin is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Ouster Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ouster Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ouster unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMagin and Ouster

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

The idea behind EMagin and Ouster Inc 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.