Correlation Between Murata Manufacturing and Ouster

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

By analyzing existing cross correlation between Murata Manufacturing Co and Ouster Inc, you can compare the effects of market volatilities on Murata Manufacturing and Ouster 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 Murata Manufacturing with a short position of Ouster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murata Manufacturing and Ouster.

Diversification Opportunities for Murata Manufacturing and Ouster

-0.61

Correlation Coefficient

Murata Manufacturing  Ouster

Excellent diversification

The 3 months correlation between Murata and Ouster is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Murata Manufacturing Co and Ouster Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ouster Inc and Murata Manufacturing 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 Murata Manufacturing Co are associated (or correlated) with Ouster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ouster Inc has no effect on the direction of Murata Manufacturing i.e., Murata Manufacturing and Ouster go up and down completely randomly.

Pair Corralation between Murata Manufacturing and Ouster

Assuming the 90 days horizon Murata Manufacturing is expected to generate 29.73 times less return on investment than Ouster. But when comparing it to its historical volatility, Murata Manufacturing Co is 1.04 times less risky than Ouster. It trades about 0.01 of its potential returns per unit of risk. Ouster Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  630.00  in Ouster Inc on September 30, 2024 and sell it today you would earn a total of  619.00  from holding Ouster Inc or generate 98.25% return on investment over 90 days.

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

Murata Manufacturing Co  vs.  Ouster Inc

Murata Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Murata Manufacturing Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Murata Manufacturing is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Ouster Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ouster Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ouster unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Murata Manufacturing and Ouster

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

The idea behind Murata Manufacturing Co and Ouster Inc 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.