Correlation Between Ossiam Food and Ossiam Lux

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

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

Diversification Opportunities for Ossiam Food and Ossiam Lux

0.83

Correlation Coefficient

Ossiam Food  Ossiam Lux

Very poor diversification

The 3 months correlation between Ossiam and Ossiam is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ossiam Food for and Ossiam Lux Barclays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ossiam Lux Barclays and Ossiam Food 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 Ossiam Food for are associated (or correlated) with Ossiam Lux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ossiam Lux Barclays has no effect on the direction of Ossiam Food i.e., Ossiam Food and Ossiam Lux go up and down completely randomly.

Pair Corralation between Ossiam Food and Ossiam Lux

Assuming the 90 days trading horizon Ossiam Food for is expected to under-perform the Ossiam Lux. But the etf apears to be less risky and, when comparing its historical volatility, Ossiam Food for is 1.39 times less risky than Ossiam Lux. The etf trades about -0.04 of its potential returns per unit of risk. The Ossiam Lux Barclays is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  12,438  in Ossiam Lux Barclays on September 27, 2024 and sell it today you would earn a total of  294.00  from holding Ossiam Lux Barclays or generate 2.36% return on investment over 90 days.

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

Ossiam Food for  vs.  Ossiam Lux Barclays

Ossiam Food for

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ossiam Food for has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Ossiam Food is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ossiam Lux Barclays

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ossiam Lux Barclays are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Ossiam Lux is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ossiam Food and Ossiam Lux

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

The idea behind Ossiam Food for and Ossiam Lux Barclays 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.