Correlation Between ODIN Investments and Industrial Engineering

Can any of the company-specific risk be diversified away by investing in both ODIN Investments and Industrial Engineering 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 ODIN Investments and Industrial Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ODIN Investments and Industrial Engineering Projects, you can compare the effects of market volatilities on ODIN Investments and Industrial Engineering 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 ODIN Investments with a short position of Industrial Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODIN Investments and Industrial Engineering.

Diversification Opportunities for ODIN Investments and Industrial Engineering

-0.28

Correlation Coefficient

ODIN Investments  Industrial Engineering

Very good diversification

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

Pair Corralation between ODIN Investments and Industrial Engineering

Assuming the 90 days trading horizon ODIN Investments is expected to generate 5.99 times less return on investment than Industrial Engineering. But when comparing it to its historical volatility, ODIN Investments is 1.93 times less risky than Industrial Engineering. It trades about 0.08 of its potential returns per unit of risk. Industrial Engineering Projects is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Industrial Engineering Projects on December 4, 2024 and sell it today you would earn a total of  6.00  from holding Industrial Engineering Projects or generate 20.0% return on investment over 90 days.

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

ODIN Investments  vs.  Industrial Engineering Project

ODIN Investments

Risk-Adjusted Performance

Very Weak

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

Industrial Engineering

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Engineering Projects are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Industrial Engineering reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ODIN Investments and Industrial Engineering

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

The idea behind ODIN Investments and Industrial Engineering Projects 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.