Correlation Between Open Text and Big Rock
Can any of the company-specific risk be diversified away by investing in both Open Text and Big Rock 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 Open Text and Big Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Open Text Corp and Big Rock Brewery, you can compare the effects of market volatilities on Open Text and Big Rock 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 Open Text with a short position of Big Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Text and Big Rock.
Diversification Opportunities for Open Text and Big Rock
Poor diversification
The 3 months correlation between Open and Big is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Open Text Corp and Big Rock Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Rock Brewery and Open Text 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 Open Text Corp are associated (or correlated) with Big Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Rock Brewery has no effect on the direction of Open Text i.e., Open Text and Big Rock go up and down completely randomly.
Pair Corralation between Open Text and Big Rock
Assuming the 90 days trading horizon Open Text Corp is expected to generate 0.54 times more return on investment than Big Rock. However, Open Text Corp is 1.86 times less risky than Big Rock. It trades about -0.03 of its potential returns per unit of risk. Big Rock Brewery is currently generating about -0.14 per unit of risk. If you would invest 4,838 in Open Text Corp on September 11, 2025 and sell it today you would lose (223.00) from holding Open Text Corp or give up 4.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Open Text Corp vs. Big Rock Brewery
Performance |
| Timeline |
| Open Text Corp |
| Big Rock Brewery |
Open Text and Big Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Open Text and Big Rock
The main advantage of trading using opposite Open Text and Big Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Text position performs unexpectedly, Big Rock 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 Big Rock will offset losses from the drop in Big Rock's long position.| Open Text vs. Descartes Systems Group | Open Text vs. Lumine Group | Open Text vs. Topicus | Open Text vs. Enghouse Systems |
| Big Rock vs. Colabor Group | Big Rock vs. Burcon NutraScience | Big Rock vs. Pesorama | Big Rock vs. Else Nutrition Holdings |
Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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