Correlation Between Coda Octopus and STADION TRILOGY

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

Diversification Opportunities for Coda Octopus and STADION TRILOGY

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Coda Octopus and STADION is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and STADION TRILOGY ALTERNATIVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STADION TRILOGY ALTE 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 STADION TRILOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STADION TRILOGY ALTE has no effect on the direction of Coda Octopus i.e., Coda Octopus and STADION TRILOGY go up and down completely randomly.

Pair Corralation between Coda Octopus and STADION TRILOGY

Given the investment horizon of 90 days Coda Octopus Group is expected to generate 7.43 times more return on investment than STADION TRILOGY. However, Coda Octopus is 7.43 times more volatile than STADION TRILOGY ALTERNATIVE. It trades about 0.0 of its potential returns per unit of risk. STADION TRILOGY ALTERNATIVE is currently generating about -0.11 per unit of risk. If you would invest  752.00  in Coda Octopus Group on September 9, 2022 and sell it today you would lose (78.00)  from holding Coda Octopus Group or give up 10.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Coda Octopus Group  vs.  STADION TRILOGY ALTERNATIVE

 Performance (%) 
       Timeline  
Coda Octopus Group 
Coda Octopus Performance
15 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 15 (%) 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

STADION TRILOGY ALTE 
STADION Performance
0 of 100
Over the last 90 days STADION TRILOGY ALTERNATIVE has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, STADION TRILOGY is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

STADION Price Channel

Coda Octopus and STADION TRILOGY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coda Octopus and STADION TRILOGY

The main advantage of trading using opposite Coda Octopus and STADION TRILOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus position performs unexpectedly, STADION TRILOGY 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 STADION TRILOGY will offset losses from the drop in STADION TRILOGY's long position.
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The idea behind Coda Octopus Group and STADION TRILOGY ALTERNATIVE 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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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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