Correlation Between Leclanche and OC Oerlikon
Can any of the company-specific risk be diversified away by investing in both Leclanche 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 Leclanche and OC Oerlikon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leclanche SA and OC Oerlikon Corp, you can compare the effects of market volatilities on Leclanche 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 Leclanche with a short position of OC Oerlikon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leclanche and OC Oerlikon.
Diversification Opportunities for Leclanche and OC Oerlikon
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leclanche and OERL is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Leclanche SA 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 Leclanche 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 Leclanche SA 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 Leclanche i.e., Leclanche and OC Oerlikon go up and down completely randomly.
Pair Corralation between Leclanche and OC Oerlikon
Assuming the 90 days trading horizon Leclanche is expected to generate 1.35 times less return on investment than OC Oerlikon. In addition to that, Leclanche is 2.94 times more volatile than OC Oerlikon Corp. It trades about 0.04 of its total potential returns per unit of risk. OC Oerlikon Corp is currently generating about 0.16 per unit of volatility. If you would invest 351.00 in OC Oerlikon Corp on December 30, 2024 and sell it today you would earn a total of 72.00 from holding OC Oerlikon Corp or generate 20.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Leclanche SA vs. OC Oerlikon Corp
Performance |
Timeline |
Leclanche SA |
OC Oerlikon Corp |
Leclanche and OC Oerlikon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leclanche and OC Oerlikon
The main advantage of trading using opposite Leclanche and OC Oerlikon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leclanche 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.Leclanche vs. Meyer Burger Tech | Leclanche vs. Evolva Holding SA | Leclanche vs. Kudelski | Leclanche vs. OC Oerlikon Corp |
OC Oerlikon vs. Sulzer AG | OC Oerlikon vs. Helvetia Holding AG | OC Oerlikon vs. Swiss Life Holding | OC Oerlikon vs. Adecco Group AG |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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