Correlation Between 50249AAH6 and Coda Octopus

Can any of the company-specific risk be diversified away by investing in both 50249AAH6 and Coda Octopus 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 50249AAH6 and Coda Octopus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB INTERNATIONAL FINANCE and Coda Octopus Group, you can compare the effects of market volatilities on 50249AAH6 and Coda Octopus 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 50249AAH6 with a short position of Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAH6 and Coda Octopus.

Diversification Opportunities for 50249AAH6 and Coda Octopus

-0.51

Correlation Coefficient

50249AAH6  Coda Octopus

Excellent diversification

The 3 months correlation between 50249AAH6 and Coda is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group and 50249AAH6 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 LYB INTERNATIONAL FINANCE are associated (or correlated) with Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of 50249AAH6 i.e., 50249AAH6 and Coda Octopus go up and down completely randomly.

Pair Corralation between 50249AAH6 and Coda Octopus

Assuming the 90 days trading horizon LYB INTERNATIONAL FINANCE is expected to generate 0.28 times more return on investment than Coda Octopus. However, LYB INTERNATIONAL FINANCE is 3.52 times less risky than Coda Octopus. It trades about 0.07 of its potential returns per unit of risk. Coda Octopus Group is currently generating about -0.1 per unit of risk. If you would invest  7,280  in LYB INTERNATIONAL FINANCE on December 24, 2024 and sell it today you would earn a total of  174.00  from holding LYB INTERNATIONAL FINANCE or generate 2.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.16%
Values	Daily Returns

LYB INTERNATIONAL FINANCE  vs.  Coda Octopus Group

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LYB INTERNATIONAL FINANCE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 50249AAH6 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Coda Octopus Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coda Octopus Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with 50249AAH6 and Coda Octopus

The main advantage of trading using opposite 50249AAH6 and Coda Octopus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAH6 position performs unexpectedly, Coda Octopus 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 Coda Octopus will offset losses from the drop in Coda Octopus' long position.

The idea behind LYB INTERNATIONAL FINANCE and Coda Octopus Group 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 CEOs Directory module to screen CEOs from public companies around the world.