Correlation Between Tufton Oceanic and Arcontech Group

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

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

Diversification Opportunities for Tufton Oceanic and Arcontech Group

0.86

Correlation Coefficient

Tufton Oceanic  Arcontech Group

Very poor diversification

The 3 months correlation between Tufton and Arcontech is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tufton Oceanic Assets and Arcontech Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcontech Group Plc and Tufton Oceanic 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 Tufton Oceanic Assets are associated (or correlated) with Arcontech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcontech Group Plc has no effect on the direction of Tufton Oceanic i.e., Tufton Oceanic and Arcontech Group go up and down completely randomly.

Pair Corralation between Tufton Oceanic and Arcontech Group

Assuming the 90 days trading horizon Tufton Oceanic is expected to generate 1.14 times less return on investment than Arcontech Group. But when comparing it to its historical volatility, Tufton Oceanic Assets is 1.58 times less risky than Arcontech Group. It trades about 0.21 of its potential returns per unit of risk. Arcontech Group Plc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  7,700  in Arcontech Group Plc on April 20, 2025 and sell it today you would earn a total of  1,200  from holding Arcontech Group Plc or generate 15.58% return on investment over 90 days.

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

Tufton Oceanic Assets  vs.  Arcontech Group Plc

Tufton Oceanic Assets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tufton Oceanic Assets are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Tufton Oceanic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Arcontech Group Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arcontech Group Plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Arcontech Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tufton Oceanic and Arcontech Group

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

The idea behind Tufton Oceanic Assets and Arcontech Group Plc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .