Correlation Between Alaska Energy and Ocumetics Technology

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

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

Diversification Opportunities for Alaska Energy and Ocumetics Technology

-0.16

Correlation Coefficient

Alaska Energy  Ocumetics Technology

Good diversification

The 3 months correlation between Alaska and Ocumetics is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals 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 Alaska Energy 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 Alaska Energy Metals 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 Alaska Energy i.e., Alaska Energy and Ocumetics Technology go up and down completely randomly.

Pair Corralation between Alaska Energy and Ocumetics Technology

Assuming the 90 days trading horizon Alaska Energy Metals is expected to under-perform the Ocumetics Technology. In addition to that, Alaska Energy is 1.26 times more volatile than Ocumetics Technology Corp. It trades about -0.18 of its total potential returns per unit of risk. Ocumetics Technology Corp is currently generating about -0.03 per unit of volatility. If you would invest  32.00  in Ocumetics Technology Corp on September 14, 2024 and sell it today you would lose (3.00) from holding Ocumetics Technology Corp or give up 9.38% of portfolio value over 90 days.

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

Alaska Energy Metals  vs.  Ocumetics Technology Corp

Alaska Energy Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alaska Energy Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's primary indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Ocumetics Technology Corp

Risk-Adjusted Performance

0 of 100

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 recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Alaska Energy and Ocumetics Technology

The main advantage of trading using opposite Alaska Energy and Ocumetics Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy 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 Alaska Energy Metals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.