Correlation Between Oakley Capital and Edita Food

Can any of the company-specific risk be diversified away by investing in both Oakley Capital and Edita Food 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 Oakley Capital and Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oakley Capital Investments and Edita Food Industries, you can compare the effects of market volatilities on Oakley Capital and Edita Food 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 Oakley Capital with a short position of Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Edita Food.

Diversification Opportunities for Oakley Capital and Edita Food

0.42

Correlation Coefficient

Oakley Capital  Edita Food

Very weak diversification

The 3 months correlation between Oakley and Edita is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries and Oakley Capital 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 Oakley Capital Investments are associated (or correlated) with Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of Oakley Capital i.e., Oakley Capital and Edita Food go up and down completely randomly.

Pair Corralation between Oakley Capital and Edita Food

Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.2 times more return on investment than Edita Food. However, Oakley Capital Investments is 4.98 times less risky than Edita Food. It trades about -0.15 of its potential returns per unit of risk. Edita Food Industries is currently generating about -0.07 per unit of risk. If you would invest  51,467  in Oakley Capital Investments on September 3, 2024 and sell it today you would lose (3,417) from holding Oakley Capital Investments or give up 6.64% of portfolio value over 90 days.

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

Oakley Capital Investments  vs.  Edita Food Industries

Oakley Capital Inves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oakley Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Edita Food Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Edita Food Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Oakley Capital and Edita Food

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

The idea behind Oakley Capital Investments and Edita Food Industries 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.