Correlation Between Ocumetics Technology and Westaim Corp

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

Diversification Opportunities for Ocumetics Technology and Westaim Corp

-0.38

Correlation Coefficient

Ocumetics Technology  Westaim Corp

Very good diversification

The 3 months correlation between Ocumetics and Westaim is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ocumetics Technology Corp and Westaim Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westaim 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 Westaim Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westaim Corp has no effect on the direction of Ocumetics Technology i.e., Ocumetics Technology and Westaim Corp go up and down completely randomly.

Pair Corralation between Ocumetics Technology and Westaim Corp

Assuming the 90 days horizon Ocumetics Technology Corp is expected to generate 3.53 times more return on investment than Westaim Corp. However, Ocumetics Technology is 3.53 times more volatile than Westaim Corp. It trades about 0.02 of its potential returns per unit of risk. Westaim Corp is currently generating about 0.02 per unit of risk. If you would invest  29.00  in Ocumetics Technology Corp on December 30, 2024 and sell it today you would lose (1.00) from holding Ocumetics Technology Corp or give up 3.45% of portfolio value over 90 days.

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

Ocumetics Technology Corp  vs.  Westaim Corp

Ocumetics Technology Corp

Risk-Adjusted Performance

Weak

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 April 2025.

Westaim Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Westaim Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Westaim Corp is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ocumetics Technology and Westaim Corp

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

The idea behind Ocumetics Technology Corp and Westaim 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.