Correlation Between Oriental Culture and Wisekey International

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

Diversification Opportunities for Oriental Culture and Wisekey International

-0.28

Correlation Coefficient

Oriental Culture  Wisekey International

Very good diversification

The 3 months correlation between Oriental and Wisekey is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Culture Holding and Wisekey International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisekey International 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 Wisekey International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisekey International has no effect on the direction of Oriental Culture i.e., Oriental Culture and Wisekey International go up and down completely randomly.

Pair Corralation between Oriental Culture and Wisekey International

Considering the 90-day investment horizon Oriental Culture Holding is expected to under-perform the Wisekey International. But the stock apears to be less risky and, when comparing its historical volatility, Oriental Culture Holding is 3.78 times less risky than Wisekey International. The stock trades about -0.05 of its potential returns per unit of risk. The Wisekey International Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  938.00  in Wisekey International Holding on October 22, 2024 and sell it today you would lose (202.00) from holding Wisekey International Holding or give up 21.54% of portfolio value over 90 days.

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

Oriental Culture Holding  vs.  Wisekey International Holding

Oriental Culture Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oriental Culture Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Wisekey International

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Oriental Culture and Wisekey International

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

The idea behind Oriental Culture Holding and Wisekey International Holding 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.