Correlation Between Colas SA and Oxbridge

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

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

Diversification Opportunities for Colas SA and Oxbridge

-0.49

Correlation Coefficient

Colas SA  Oxbridge

Very good diversification

The 3 months correlation between Colas and Oxbridge is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Colas SA and Oxbridge Re Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxbridge Re Holdings and Colas 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 Colas SA are associated (or correlated) with Oxbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxbridge Re Holdings has no effect on the direction of Colas SA i.e., Colas SA and Oxbridge go up and down completely randomly.

Pair Corralation between Colas SA and Oxbridge

If you would invest  239.00  in Oxbridge Re Holdings on September 12, 2024 and sell it today you would earn a total of  123.00  from holding Oxbridge Re Holdings or generate 51.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Colas SA  vs.  Oxbridge Re Holdings

Colas SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oxbridge Re Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oxbridge Re Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental drivers, Oxbridge reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Colas SA and Oxbridge

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

The idea behind Colas SA and Oxbridge Re Holdings 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.