Correlation Between DKargo and OKB

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

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

Diversification Opportunities for DKargo and OKB

0.79

Correlation Coefficient

DKargo  OKB

Poor diversification

The 3 months correlation between DKargo and OKB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding dKargo and OKB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OKB and DKargo 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 dKargo are associated (or correlated) with OKB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OKB has no effect on the direction of DKargo i.e., DKargo and OKB go up and down completely randomly.

Pair Corralation between DKargo and OKB

Assuming the 90 days trading horizon dKargo is expected to under-perform the OKB. In addition to that, DKargo is 1.37 times more volatile than OKB. It trades about -0.16 of its total potential returns per unit of risk. OKB is currently generating about -0.19 per unit of volatility. If you would invest  6,444  in OKB on January 26, 2024 and sell it today you would lose (999.00) from holding OKB or give up 15.5% of portfolio value over 90 days.

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

dKargo  vs.  OKB

dKargo

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in dKargo are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, DKargo may actually be approaching a critical reversion point that can send shares even higher in May 2024.

OKB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OKB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, OKB may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with DKargo and OKB

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

The idea behind dKargo and OKB 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.