Correlation Between Implenia and OC Oerlikon

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

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

Diversification Opportunities for Implenia and OC Oerlikon

0.9

Correlation Coefficient

Implenia  OC Oerlikon

Almost no diversification

The 3 months correlation between Implenia and OERL is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and OC Oerlikon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OC Oerlikon Corp and Implenia 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 Implenia AG are associated (or correlated) with OC Oerlikon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OC Oerlikon Corp has no effect on the direction of Implenia i.e., Implenia and OC Oerlikon go up and down completely randomly.

Pair Corralation between Implenia and OC Oerlikon

Assuming the 90 days trading horizon Implenia AG is expected to generate 1.22 times more return on investment than OC Oerlikon. However, Implenia is 1.22 times more volatile than OC Oerlikon Corp. It trades about 0.21 of its potential returns per unit of risk. OC Oerlikon Corp is currently generating about 0.17 per unit of risk. If you would invest  3,070  in Implenia AG on December 28, 2024 and sell it today you would earn a total of  1,060  from holding Implenia AG or generate 34.53% return on investment over 90 days.

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

Implenia AG  vs.  OC Oerlikon Corp

Implenia AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Implenia showed solid returns over the last few months and may actually be approaching a breakup point.

OC Oerlikon Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OC Oerlikon Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, OC Oerlikon showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Implenia and OC Oerlikon

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

The idea behind Implenia AG and OC Oerlikon Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.