Correlation Between WT Offshore and Oculis Holding

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

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

Diversification Opportunities for WT Offshore and Oculis Holding

0.01

Correlation Coefficient

WT Offshore  Oculis Holding

Significant diversification

The 3 months correlation between WTI and Oculis is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding WT Offshore and Oculis Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculis Holding AG and WT Offshore 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 WT Offshore are associated (or correlated) with Oculis Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculis Holding AG has no effect on the direction of WT Offshore i.e., WT Offshore and Oculis Holding go up and down completely randomly.

Pair Corralation between WT Offshore and Oculis Holding

Considering the 90-day investment horizon WT Offshore is expected to generate 1.41 times more return on investment than Oculis Holding. However, WT Offshore is 1.41 times more volatile than Oculis Holding AG. It trades about -0.07 of its potential returns per unit of risk. Oculis Holding AG is currently generating about -0.18 per unit of risk. If you would invest  208.00  in WT Offshore on September 2, 2024 and sell it today you would lose (14.00) from holding WT Offshore or give up 6.73% of portfolio value over 90 days.

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

WT Offshore  vs.  Oculis Holding AG

WT Offshore

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WT Offshore has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, WT Offshore is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Oculis Holding AG

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oculis Holding AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental indicators, Oculis Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WT Offshore and Oculis Holding

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

The idea behind WT Offshore and Oculis Holding AG 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..