Correlation Between Ocumetics Technology and Libero Copper

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

Diversification Opportunities for Ocumetics Technology and Libero Copper

0.39

Correlation Coefficient

Ocumetics Technology  Libero Copper

Weak diversification

The 3 months correlation between Ocumetics and Libero is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ocumetics Technology Corp and Libero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libero Copper Corp 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 Libero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libero Copper Corp has no effect on the direction of Ocumetics Technology i.e., Ocumetics Technology and Libero Copper go up and down completely randomly.

Pair Corralation between Ocumetics Technology and Libero Copper

Assuming the 90 days horizon Ocumetics Technology Corp is expected to generate 0.97 times more return on investment than Libero Copper. However, Ocumetics Technology Corp is 1.03 times less risky than Libero Copper. It trades about 0.02 of its potential returns per unit of risk. Libero Copper Corp is currently generating about -0.04 per unit of risk. If you would invest  36.00  in Ocumetics Technology Corp on October 22, 2024 and sell it today you would lose (1.00) from holding Ocumetics Technology Corp or give up 2.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Ocumetics Technology Corp  vs.  Libero Copper Corp

Ocumetics Technology Corp

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ocumetics Technology Corp are ranked lower than 1 (%) 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.

Libero Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Libero Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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 Libero Copper

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

The idea behind Ocumetics Technology Corp and Libero Copper Corp 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.