Correlation Between Parx Plastics and Oeneo SA

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

By analyzing existing cross correlation between Parx Plastics NV and Oeneo SA, you can compare the effects of market volatilities on Parx Plastics and Oeneo SA 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 Parx Plastics with a short position of Oeneo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parx Plastics and Oeneo SA.

Diversification Opportunities for Parx Plastics and Oeneo SA

0.47

Correlation Coefficient

Parx Plastics  Oeneo SA

Very weak diversification

The 3 months correlation between Parx and Oeneo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Parx Plastics NV and Oeneo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oeneo SA and Parx Plastics 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 Parx Plastics NV are associated (or correlated) with Oeneo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oeneo SA has no effect on the direction of Parx Plastics i.e., Parx Plastics and Oeneo SA go up and down completely randomly.

Pair Corralation between Parx Plastics and Oeneo SA

Assuming the 90 days trading horizon Parx Plastics NV is expected to under-perform the Oeneo SA. In addition to that, Parx Plastics is 3.75 times more volatile than Oeneo SA. It trades about -0.19 of its total potential returns per unit of risk. Oeneo SA is currently generating about -0.11 per unit of volatility. If you would invest  980.00  in Oeneo SA on December 26, 2024 and sell it today you would lose (80.00) from holding Oeneo SA or give up 8.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Parx Plastics NV  vs.  Oeneo SA

Parx Plastics NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Parx Plastics NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Oeneo SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oeneo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Parx Plastics and Oeneo SA

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

The idea behind Parx Plastics NV and Oeneo 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.