Correlation Between Premium Income and Ocumetics Technology

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

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

Diversification Opportunities for Premium Income and Ocumetics Technology

0.17

Correlation Coefficient

Premium Income  Ocumetics Technology

Average diversification

The 3 months correlation between Premium and Ocumetics is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income 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 Premium Income 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 Premium Income 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 Premium Income i.e., Premium Income and Ocumetics Technology go up and down completely randomly.

Pair Corralation between Premium Income and Ocumetics Technology

Assuming the 90 days trading horizon Premium Income is expected to generate 0.52 times more return on investment than Ocumetics Technology. However, Premium Income is 1.92 times less risky than Ocumetics Technology. It trades about 0.08 of its potential returns per unit of risk. Ocumetics Technology Corp is currently generating about 0.02 per unit of risk. If you would invest  591.00  in Premium Income on September 13, 2024 and sell it today you would earn a total of  46.00  from holding Premium Income or generate 7.78% return on investment over 90 days.

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

Premium Income  vs.  Ocumetics Technology Corp

Premium Income

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Premium Income are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Premium Income may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ocumetics Technology Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ocumetics Technology Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ocumetics Technology is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Premium Income and Ocumetics Technology

The main advantage of trading using opposite Premium Income and Ocumetics Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Income 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 Premium Income 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.

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 Stocks Directory module to find actively traded stocks across global markets.