Correlation Between Ocean Power and ENGlobal

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

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

Diversification Opportunities for Ocean Power and ENGlobal

0.0

Correlation Coefficient

Ocean Power  ENGlobal

Pay attention - limited upside

The 3 months correlation between Ocean and ENGlobal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Power Technologies and ENGlobal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGlobal and Ocean Power 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 Power Technologies are associated (or correlated) with ENGlobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGlobal has no effect on the direction of Ocean Power i.e., Ocean Power and ENGlobal go up and down completely randomly.

Pair Corralation between Ocean Power and ENGlobal

If you would invest  45.00  in Ocean Power Technologies on October 26, 2024 and sell it today you would earn a total of  39.57  from holding Ocean Power Technologies or generate 87.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Ocean Power Technologies  vs.  ENGlobal

Ocean Power Technologies

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ocean Power Technologies are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Ocean Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

ENGlobal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENGlobal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ocean Power and ENGlobal

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

The idea behind Ocean Power Technologies and ENGlobal 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.