Correlation Between Xtract One and Ocumetics Technology

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

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

Diversification Opportunities for Xtract One and Ocumetics Technology

0.35

Correlation Coefficient

Xtract One  Ocumetics Technology

Weak diversification

The 3 months correlation between Xtract and Ocumetics is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Ocumetics Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocumetics Technology Corp and Xtract One 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 Xtract One Technologies are associated (or correlated) with Ocumetics Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocumetics Technology Corp has no effect on the direction of Xtract One i.e., Xtract One and Ocumetics Technology go up and down completely randomly.

Pair Corralation between Xtract One and Ocumetics Technology

Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Ocumetics Technology. But the stock apears to be less risky and, when comparing its historical volatility, Xtract One Technologies is 1.49 times less risky than Ocumetics Technology. The stock trades about -0.12 of its potential returns per unit of risk. The Ocumetics Technology Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Ocumetics Technology Corp on December 31, 2024 and sell it today you would lose (2.00) from holding Ocumetics Technology Corp or give up 6.67% of portfolio value over 90 days.

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

Xtract One Technologies  vs.  Ocumetics Technology Corp

Xtract One Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xtract One Technologies 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 very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ocumetics Technology Corp

Risk-Adjusted Performance

Weak

Over the last 90 days Ocumetics Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ocumetics Technology 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 Xtract One and Ocumetics Technology

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

The idea behind Xtract One Technologies and Ocumetics Technology 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 Anywhere module to track or share privately all of your investments from the convenience of any device.