Correlation Between Ocean Harvest and Schroders Investment

Can any of the company-specific risk be diversified away by investing in both Ocean Harvest and Schroders Investment 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 Ocean Harvest and Schroders Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ocean Harvest Technology and Schroders Investment Trusts, you can compare the effects of market volatilities on Ocean Harvest and Schroders Investment 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 Ocean Harvest with a short position of Schroders Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Harvest and Schroders Investment.

Diversification Opportunities for Ocean Harvest and Schroders Investment

-0.19

Correlation Coefficient

Ocean Harvest  Schroders Investment

Good diversification

The 3 months correlation between Ocean and Schroders is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Harvest Technology and Schroders Investment Trusts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders Investment and Ocean Harvest 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 Ocean Harvest Technology are associated (or correlated) with Schroders Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders Investment has no effect on the direction of Ocean Harvest i.e., Ocean Harvest and Schroders Investment go up and down completely randomly.

Pair Corralation between Ocean Harvest and Schroders Investment

Assuming the 90 days trading horizon Ocean Harvest Technology is expected to under-perform the Schroders Investment. In addition to that, Ocean Harvest is 3.29 times more volatile than Schroders Investment Trusts. It trades about -0.03 of its total potential returns per unit of risk. Schroders Investment Trusts is currently generating about 0.04 per unit of volatility. If you would invest  38,885  in Schroders Investment Trusts on September 20, 2024 and sell it today you would earn a total of  8,315  from holding Schroders Investment Trusts or generate 21.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.25%
Values	Daily Returns

Ocean Harvest Technology  vs.  Schroders Investment Trusts

Ocean Harvest Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocean Harvest Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Schroders Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Schroders Investment Trusts are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Schroders Investment is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ocean Harvest and Schroders Investment

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

The idea behind Ocean Harvest Technology and Schroders Investment Trusts 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.