Correlation Between Ocumetics Technology and Cielo Waste

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

By analyzing existing cross correlation between Ocumetics Technology Corp and Cielo Waste Solutions, you can compare the effects of market volatilities on Ocumetics Technology and Cielo Waste 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 Ocumetics Technology with a short position of Cielo Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocumetics Technology and Cielo Waste.

Diversification Opportunities for Ocumetics Technology and Cielo Waste

0.61

Correlation Coefficient

Ocumetics Technology  Cielo Waste

Poor diversification

The 3 months correlation between Ocumetics and Cielo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ocumetics Technology Corp and Cielo Waste Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cielo Waste Solutions and Ocumetics 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 Ocumetics Technology Corp are associated (or correlated) with Cielo Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cielo Waste Solutions has no effect on the direction of Ocumetics Technology i.e., Ocumetics Technology and Cielo Waste go up and down completely randomly.

Pair Corralation between Ocumetics Technology and Cielo Waste

Assuming the 90 days horizon Ocumetics Technology Corp is expected to generate 0.61 times more return on investment than Cielo Waste. However, Ocumetics Technology Corp is 1.65 times less risky than Cielo Waste. It trades about 0.01 of its potential returns per unit of risk. Cielo Waste Solutions is currently generating about -0.03 per unit of risk. If you would invest  41.00  in Ocumetics Technology Corp on October 6, 2024 and sell it today you would lose (8.00) from holding Ocumetics Technology Corp or give up 19.51% of portfolio value over 90 days.

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

Ocumetics Technology Corp  vs.  Cielo Waste Solutions

Ocumetics Technology Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ocumetics Technology Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ocumetics Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cielo Waste Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cielo Waste Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Ocumetics Technology and Cielo Waste

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

The idea behind Ocumetics Technology Corp and Cielo Waste Solutions 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 Anywhere module to track or share privately all of your investments from the convenience of any device.