Correlation Between Ontology and SEELE

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

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

Diversification Opportunities for Ontology and SEELE

0.0

Correlation Coefficient

Ontology  SEELE

Pay attention - limited upside

The 3 months correlation between Ontology and SEELE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ontology and SEELE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEELE and Ontology 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 Ontology are associated (or correlated) with SEELE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEELE has no effect on the direction of Ontology i.e., Ontology and SEELE go up and down completely randomly.

Pair Corralation between Ontology and SEELE

If you would invest  17.00  in Ontology on September 3, 2024 and sell it today you would earn a total of  12.00  from holding Ontology or generate 70.59% return on investment over 90 days.

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

Ontology  vs.  SEELE

Ontology

Risk-Adjusted Performance

15 of 100

Good

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

SEELE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ontology and SEELE

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

The idea behind Ontology and SEELE 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.

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 the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.