Correlation Between Aperam SA and OCI NV

Can any of the company-specific risk be diversified away by investing in both Aperam SA and OCI NV 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 Aperam SA and OCI NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aperam SA and OCI NV, you can compare the effects of market volatilities on Aperam SA and OCI NV 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 Aperam SA with a short position of OCI NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aperam SA and OCI NV.

Diversification Opportunities for Aperam SA and OCI NV

-0.51

Correlation Coefficient

Aperam SA  OCI NV

Excellent diversification

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

Pair Corralation between Aperam SA and OCI NV

Assuming the 90 days trading horizon Aperam SA is expected to generate 0.75 times more return on investment than OCI NV. However, Aperam SA is 1.34 times less risky than OCI NV. It trades about 0.02 of its potential returns per unit of risk. OCI NV is currently generating about 0.0 per unit of risk. If you would invest  2,486  in Aperam SA on September 5, 2024 and sell it today you would earn a total of  206.00  from holding Aperam SA or generate 8.29% return on investment over 90 days.

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

Aperam SA  vs.  OCI NV

Aperam SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aperam SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aperam SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

OCI NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OCI NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Aperam SA and OCI NV

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

The idea behind Aperam SA and OCI NV 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.