Correlation Between Coda Octopus and OCA Acquisition

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Coda Octopus and OCA Acquisition 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 Coda Octopus and OCA Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coda Octopus Group and OCA Acquisition Corp, you can compare the effects of market volatilities on Coda Octopus and OCA Acquisition 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 Coda Octopus with a short position of OCA Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coda Octopus and OCA Acquisition.

Diversification Opportunities for Coda Octopus and OCA Acquisition

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Coda Octopus and OCA Acquisition is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and OCA Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCA Acquisition Corp and Coda Octopus 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 Coda Octopus Group are associated (or correlated) with OCA Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCA Acquisition Corp has no effect on the direction of Coda Octopus i.e., Coda Octopus and OCA Acquisition go up and down completely randomly.

Pair Corralation between Coda Octopus and OCA Acquisition

Given the investment horizon of 90 days Coda Octopus Group is expected to generate 10.28 times more return on investment than OCA Acquisition. However, Coda Octopus is 10.28 times more volatile than OCA Acquisition Corp. It trades about 0.02 of its potential returns per unit of risk. OCA Acquisition Corp is currently generating about 0.03 per unit of risk. If you would invest  627.00  in Coda Octopus Group on August 28, 2022 and sell it today you would earn a total of  20.00  from holding Coda Octopus Group or generate 3.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy87.55%
ValuesDaily Returns

Coda Octopus Group  vs.  OCA Acquisition Corp

 Performance (%) 
       Timeline  
Coda Octopus Group 
Coda Octopus Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Coda Octopus sustained solid returns over the last few months and may actually be approaching a breakup point.

Coda Octopus Price Channel

OCA Acquisition Corp 
OCA Acquisition Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in OCA Acquisition Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, OCA Acquisition is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

OCA Acquisition Price Channel

Coda Octopus and OCA Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coda Octopus and OCA Acquisition

The main advantage of trading using opposite Coda Octopus and OCA Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus position performs unexpectedly, OCA Acquisition 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 OCA Acquisition will offset losses from the drop in OCA Acquisition's long position.
Coda Octopus vs. General Dynamics Corp
Coda Octopus vs. Boeing Company
Coda Octopus vs. Lockheed Martin Corp
Coda Octopus vs. Northrop Grumman Corp
The idea behind Coda Octopus Group and OCA Acquisition 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.
OCA Acquisition vs. Arch Capital Grp
Check out your portfolio center. 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go