Correlation Between Ocumetics Technology and Enbridge Pref

Can any of the company-specific risk be diversified away by investing in both Ocumetics Technology and Enbridge Pref 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 Enbridge Pref 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 Enbridge Pref 5, you can compare the effects of market volatilities on Ocumetics Technology and Enbridge Pref 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 Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocumetics Technology and Enbridge Pref.

Diversification Opportunities for Ocumetics Technology and Enbridge Pref

-0.69

Correlation Coefficient

Ocumetics Technology  Enbridge Pref

Excellent diversification

The 3 months correlation between Ocumetics and Enbridge is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ocumetics Technology Corp and Enbridge Pref 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 5 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 Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 5 has no effect on the direction of Ocumetics Technology i.e., Ocumetics Technology and Enbridge Pref go up and down completely randomly.

Pair Corralation between Ocumetics Technology and Enbridge Pref

Assuming the 90 days horizon Ocumetics Technology Corp is expected to under-perform the Enbridge Pref. In addition to that, Ocumetics Technology is 11.24 times more volatile than Enbridge Pref 5. It trades about -0.03 of its total potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.19 per unit of volatility. If you would invest  2,358  in Enbridge Pref 5 on October 6, 2024 and sell it today you would earn a total of  63.00  from holding Enbridge Pref 5 or generate 2.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Ocumetics Technology Corp  vs.  Enbridge Pref 5

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.

Enbridge Pref 5

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref 5 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Enbridge Pref is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ocumetics Technology and Enbridge Pref

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

The idea behind Ocumetics Technology Corp and Enbridge Pref 5 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.