Correlation Between Oakley Capital and Tatton Asset

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

By analyzing existing cross correlation between Oakley Capital Investments and Tatton Asset Management, you can compare the effects of market volatilities on Oakley Capital and Tatton Asset 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 Oakley Capital with a short position of Tatton Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Tatton Asset.

Diversification Opportunities for Oakley Capital and Tatton Asset

-0.27

Correlation Coefficient

Oakley Capital  Tatton Asset

Very good diversification

The 3 months correlation between Oakley and Tatton is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Tatton Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatton Asset Management and Oakley Capital 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 Oakley Capital Investments are associated (or correlated) with Tatton Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatton Asset Management has no effect on the direction of Oakley Capital i.e., Oakley Capital and Tatton Asset go up and down completely randomly.

Pair Corralation between Oakley Capital and Tatton Asset

Assuming the 90 days trading horizon Oakley Capital Investments is expected to under-perform the Tatton Asset. But the stock apears to be less risky and, when comparing its historical volatility, Oakley Capital Investments is 2.42 times less risky than Tatton Asset. The stock trades about -0.15 of its potential returns per unit of risk. The Tatton Asset Management is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  71,223  in Tatton Asset Management on August 31, 2024 and sell it today you would lose (823.00) from holding Tatton Asset Management or give up 1.16% of portfolio value over 90 days.

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

Oakley Capital Investments  vs.  Tatton Asset Management

Oakley Capital Inves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oakley Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Tatton Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tatton Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Tatton Asset is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oakley Capital and Tatton Asset

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

The idea behind Oakley Capital Investments and Tatton Asset Management 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.