Correlation Between Coda Octopus and New Era

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

By analyzing existing cross correlation between Coda Octopus Group and New Era Energy, you can compare the effects of market volatilities on Coda Octopus and New Era 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 Coda Octopus with a short position of New Era. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coda Octopus and New Era.

Diversification Opportunities for Coda Octopus and New Era

0.55

Correlation Coefficient

Coda Octopus  New Era

Very weak diversification

The 3 months correlation between Coda and New is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and New Era Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Energy and Coda Octopus 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 Coda Octopus Group are associated (or correlated) with New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Energy has no effect on the direction of Coda Octopus i.e., Coda Octopus and New Era go up and down completely randomly.

Pair Corralation between Coda Octopus and New Era

Given the investment horizon of 90 days Coda Octopus is expected to generate 20.79 times less return on investment than New Era. But when comparing it to its historical volatility, Coda Octopus Group is 5.54 times less risky than New Era. It trades about 0.07 of its potential returns per unit of risk. New Era Energy is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  42.00  in New Era Energy on September 15, 2025 and sell it today you would earn a total of  293.00  from holding New Era Energy or generate 697.62% return on investment over 90 days.

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

Coda Octopus Group  vs.  New Era Energy

Coda Octopus Group

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Coda Octopus sustained solid returns over the last few months and may actually be approaching a breakup point.

New Era Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in New Era Energy are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, New Era demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coda Octopus and New Era

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

The idea behind Coda Octopus Group and New Era Energy 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.