Correlation Between Ocean Park and Formidable ETF

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

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

Diversification Opportunities for Ocean Park and Formidable ETF

0.85

Correlation Coefficient

Ocean Park  Formidable ETF

Very poor diversification

The 3 months correlation between Ocean and Formidable is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Park International and Formidable ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formidable ETF and Ocean Park 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 Ocean Park International are associated (or correlated) with Formidable ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formidable ETF has no effect on the direction of Ocean Park i.e., Ocean Park and Formidable ETF go up and down completely randomly.

Pair Corralation between Ocean Park and Formidable ETF

Given the investment horizon of 90 days Ocean Park International is expected to generate 1.03 times more return on investment than Formidable ETF. However, Ocean Park is 1.03 times more volatile than Formidable ETF. It trades about 0.18 of its potential returns per unit of risk. Formidable ETF is currently generating about 0.09 per unit of risk. If you would invest  2,291  in Ocean Park International on May 19, 2025 and sell it today you would earn a total of  171.00  from holding Ocean Park International or generate 7.46% return on investment over 90 days.

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

Ocean Park International  vs.  Formidable ETF

Ocean Park International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ocean Park International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward-looking signals, Ocean Park may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Formidable ETF

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Formidable ETF are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Formidable ETF is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ocean Park and Formidable ETF

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

The idea behind Ocean Park International and Formidable ETF 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.