Correlation Between Cumberland Pharmaceuticals and Ocean Thermal

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

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

Diversification Opportunities for Cumberland Pharmaceuticals and Ocean Thermal

0.0

Correlation Coefficient

Cumberland Pharmaceuticals  Ocean Thermal

Pay attention - limited upside

The 3 months correlation between Cumberland and Ocean is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cumberland Pharmaceuticals and Ocean Thermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Thermal Energy and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals are associated (or correlated) with Ocean Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Thermal Energy has no effect on the direction of Cumberland Pharmaceuticals i.e., Cumberland Pharmaceuticals and Ocean Thermal go up and down completely randomly.

Pair Corralation between Cumberland Pharmaceuticals and Ocean Thermal

If you would invest (100.00) in Ocean Thermal Energy on May 4, 2025 and sell it today you would earn a total of  100.00  from holding Ocean Thermal Energy or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cumberland Pharmaceuticals  vs.  Ocean Thermal Energy

Cumberland Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cumberland Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Cumberland Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Ocean Thermal Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ocean Thermal Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Ocean Thermal is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cumberland Pharmaceuticals and Ocean Thermal

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

The idea behind Cumberland Pharmaceuticals and Ocean Thermal 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.