Correlation Between Oriental Culture and Emerge Commerce

Can any of the company-specific risk be diversified away by investing in both Oriental Culture and Emerge Commerce 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 Emerge Commerce 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 Emerge Commerce, you can compare the effects of market volatilities on Oriental Culture and Emerge Commerce 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 Emerge Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Culture and Emerge Commerce.

Diversification Opportunities for Oriental Culture and Emerge Commerce

-0.15

Correlation Coefficient

Oriental Culture  Emerge Commerce

Good diversification

The 3 months correlation between Oriental and Emerge is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Culture Holding and Emerge Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerge Commerce 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 Emerge Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerge Commerce has no effect on the direction of Oriental Culture i.e., Oriental Culture and Emerge Commerce go up and down completely randomly.

Pair Corralation between Oriental Culture and Emerge Commerce

If you would invest  130.00  in Oriental Culture Holding on December 29, 2024 and sell it today you would earn a total of  69.00  from holding Oriental Culture Holding or generate 53.08% return on investment over 90 days.

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

Oriental Culture Holding  vs.  Emerge Commerce

Oriental Culture Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Culture Holding are ranked lower than 12 (%) 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.

Emerge Commerce

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Emerge Commerce are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent primary indicators, Emerge Commerce reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oriental Culture and Emerge Commerce

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

The idea behind Oriental Culture Holding and Emerge Commerce 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.