Correlation Between Ossiam Food and Xtrackers

Can any of the company-specific risk be diversified away by investing in both Ossiam Food and Xtrackers 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 Xtrackers 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 Xtrackers II , you can compare the effects of market volatilities on Ossiam Food and Xtrackers 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 Xtrackers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ossiam Food and Xtrackers.

Diversification Opportunities for Ossiam Food and Xtrackers

0.33

Correlation Coefficient

Ossiam Food  Xtrackers

Weak diversification

The 3 months correlation between Ossiam and Xtrackers is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ossiam Food for and Xtrackers II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers II 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 Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers II has no effect on the direction of Ossiam Food i.e., Ossiam Food and Xtrackers go up and down completely randomly.

Pair Corralation between Ossiam Food and Xtrackers

Assuming the 90 days trading horizon Ossiam Food is expected to generate 66.62 times less return on investment than Xtrackers. But when comparing it to its historical volatility, Ossiam Food for is 75.19 times less risky than Xtrackers. It trades about 0.04 of its potential returns per unit of risk. Xtrackers II is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  910.00  in Xtrackers II on September 29, 2024 and sell it today you would lose (156.00) from holding Xtrackers II or give up 17.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Ossiam Food for  vs.  Xtrackers II

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.

Xtrackers II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers II has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xtrackers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ossiam Food and Xtrackers

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

The idea behind Ossiam Food for and Xtrackers II 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.