Correlation Between Oriental Culture and Bravada Intl

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

By analyzing existing cross correlation between Oriental Culture Holding and Bravada Intl, you can compare the effects of market volatilities on Oriental Culture and Bravada Intl 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 Oriental Culture with a short position of Bravada Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Culture and Bravada Intl.

Diversification Opportunities for Oriental Culture and Bravada Intl

0.0

Correlation Coefficient

Oriental Culture  Bravada Intl

Pay attention - limited upside

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

Pair Corralation between Oriental Culture and Bravada Intl

Considering the 90-day investment horizon Oriental Culture Holding is expected to under-perform the Bravada Intl. But the stock apears to be less risky and, when comparing its historical volatility, Oriental Culture Holding is 1.56 times less risky than Bravada Intl. The stock trades about 0.0 of its potential returns per unit of risk. The Bravada Intl is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.13  in Bravada Intl on September 1, 2024 and sell it today you would lose (0.12) from holding Bravada Intl or give up 92.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Oriental Culture Holding  vs.  Bravada Intl

Oriental Culture Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Culture Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Oriental Culture reported solid returns over the last few months and may actually be approaching a breakup point.

Bravada Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bravada Intl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bravada Intl is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Oriental Culture and Bravada Intl

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

The idea behind Oriental Culture Holding and Bravada Intl 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.