Correlation Between Ostin Technology and Research Frontiers

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

By analyzing existing cross correlation between Ostin Technology Group and Research Frontiers Incorporated, you can compare the effects of market volatilities on Ostin Technology and Research Frontiers 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 Ostin Technology with a short position of Research Frontiers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ostin Technology and Research Frontiers.

Diversification Opportunities for Ostin Technology and Research Frontiers

0.28

Correlation Coefficient

Ostin Technology  Research Frontiers

Modest diversification

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

Pair Corralation between Ostin Technology and Research Frontiers

Considering the 90-day investment horizon Ostin Technology Group is expected to generate 2.54 times more return on investment than Research Frontiers. However, Ostin Technology is 2.54 times more volatile than Research Frontiers Incorporated. It trades about 0.01 of its potential returns per unit of risk. Research Frontiers Incorporated is currently generating about -0.03 per unit of risk. If you would invest  31.00  in Ostin Technology Group on September 2, 2024 and sell it today you would lose (7.00) from holding Ostin Technology Group or give up 22.58% of portfolio value over 90 days.

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

Ostin Technology Group  vs.  Research Frontiers Incorporate

Ostin Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ostin Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ostin Technology is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Research Frontiers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Research Frontiers Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Research Frontiers is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ostin Technology and Research Frontiers

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

The idea behind Ostin Technology Group and Research Frontiers Incorporated 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.