Correlation Between OPERA SOFTWARE and Packaging

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

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

Diversification Opportunities for OPERA SOFTWARE and Packaging

0.06

Correlation Coefficient

OPERA SOFTWARE  Packaging

Significant diversification

The 3 months correlation between OPERA and Packaging is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging and OPERA SOFTWARE 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 OPERA SOFTWARE are associated (or correlated) with Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging has no effect on the direction of OPERA SOFTWARE i.e., OPERA SOFTWARE and Packaging go up and down completely randomly.

Pair Corralation between OPERA SOFTWARE and Packaging

Assuming the 90 days trading horizon OPERA SOFTWARE is expected to generate 0.98 times more return on investment than Packaging. However, OPERA SOFTWARE is 1.02 times less risky than Packaging. It trades about 0.15 of its potential returns per unit of risk. Packaging of is currently generating about -0.17 per unit of risk. If you would invest  62.00  in OPERA SOFTWARE on December 23, 2024 and sell it today you would earn a total of  10.00  from holding OPERA SOFTWARE or generate 16.13% return on investment over 90 days.

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

OPERA SOFTWARE  vs.  Packaging of

OPERA SOFTWARE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OPERA SOFTWARE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, OPERA SOFTWARE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Packaging

Risk-Adjusted Performance

Very Weak

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

Pair Trading with OPERA SOFTWARE and Packaging

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

The idea behind OPERA SOFTWARE and Packaging of 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.