Correlation Between Soft World and MacroWell OMG
Can any of the company-specific risk be diversified away by investing in both Soft World and MacroWell OMG 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 Soft World and MacroWell OMG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soft World International and MacroWell OMG Digital, you can compare the effects of market volatilities on Soft World and MacroWell OMG 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 Soft World with a short position of MacroWell OMG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soft World and MacroWell OMG.
Diversification Opportunities for Soft World and MacroWell OMG
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Soft and MacroWell is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Soft World International and MacroWell OMG Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MacroWell OMG Digital and Soft World 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 Soft World International are associated (or correlated) with MacroWell OMG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MacroWell OMG Digital has no effect on the direction of Soft World i.e., Soft World and MacroWell OMG go up and down completely randomly.
Pair Corralation between Soft World and MacroWell OMG
Assuming the 90 days trading horizon Soft World International is expected to generate 0.53 times more return on investment than MacroWell OMG. However, Soft World International is 1.89 times less risky than MacroWell OMG. It trades about 0.0 of its potential returns per unit of risk. MacroWell OMG Digital is currently generating about -0.17 per unit of risk. If you would invest 13,100 in Soft World International on August 28, 2024 and sell it today you would lose (50.00) from holding Soft World International or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soft World International vs. MacroWell OMG Digital
Performance |
| Timeline |
| Soft World International |
| MacroWell OMG Digital |
Soft World and MacroWell OMG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soft World and MacroWell OMG
The main advantage of trading using opposite Soft World and MacroWell OMG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soft World position performs unexpectedly, MacroWell OMG 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 MacroWell OMG will offset losses from the drop in MacroWell OMG's long position.| Soft World vs. Gamania Digital Entertainment | Soft World vs. Chinese Gamer International | Soft World vs. Softstar Entertainment | Soft World vs. International Games System |
| MacroWell OMG vs. International Games System | MacroWell OMG vs. X Legend Entertainment Co | MacroWell OMG vs. Fun Yours Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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