Correlation Between General Commercial and Optronics Technologies

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

By analyzing existing cross correlation between General Commercial Industrial and Optronics Technologies SA, you can compare the effects of market volatilities on General Commercial and Optronics 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 General Commercial with a short position of Optronics Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Commercial and Optronics Technologies.

Diversification Opportunities for General Commercial and Optronics Technologies

0.0

Correlation Coefficient

General Commercial  Optronics Technologies

Pay attention - limited upside

The 3 months correlation between General and Optronics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Commercial Industrial and Optronics Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optronics Technologies and General Commercial 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 General Commercial Industrial are associated (or correlated) with Optronics Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optronics Technologies has no effect on the direction of General Commercial i.e., General Commercial and Optronics Technologies go up and down completely randomly.

Pair Corralation between General Commercial and Optronics Technologies

If you would invest  136.00  in General Commercial Industrial on October 10, 2024 and sell it today you would earn a total of  4.00  from holding General Commercial Industrial or generate 2.94% return on investment over 90 days.

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

General Commercial Industrial  vs.  Optronics Technologies SA

General Commercial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Optronics Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with General Commercial and Optronics Technologies

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

The idea behind General Commercial Industrial and Optronics Technologies SA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.