Correlation Between Oppein Home and DO Home

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Can any of the company-specific risk be diversified away by investing in both Oppein Home and DO Home 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 Oppein Home and DO Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppein Home Group and DO Home Collection, you can compare the effects of market volatilities on Oppein Home and DO Home 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 Oppein Home with a short position of DO Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppein Home and DO Home.

Diversification Opportunities for Oppein Home and DO Home

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Oppein and 002798 is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Oppein Home Group and DO Home Collection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO Home Collection and Oppein Home 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 Oppein Home Group are associated (or correlated) with DO Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO Home Collection has no effect on the direction of Oppein Home i.e., Oppein Home and DO Home go up and down completely randomly.

Pair Corralation between Oppein Home and DO Home

Assuming the 90 days trading horizon Oppein Home Group is expected to under-perform the DO Home. In addition to that, Oppein Home is 1.15 times more volatile than DO Home Collection. It trades about -0.1 of its total potential returns per unit of risk. DO Home Collection is currently generating about -0.04 per unit of volatility. If you would invest  422.00  in DO Home Collection on August 27, 2024 and sell it today you would lose (13.00) from holding DO Home Collection or give up 3.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Oppein Home Group  vs.  DO Home Collection

 Performance 
       Timeline  
Oppein Home Group 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Oppein Home Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oppein Home sustained solid returns over the last few months and may actually be approaching a breakup point.
DO Home Collection 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in DO Home Collection are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DO Home sustained solid returns over the last few months and may actually be approaching a breakup point.

Oppein Home and DO Home Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oppein Home and DO Home

The main advantage of trading using opposite Oppein Home and DO Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppein Home position performs unexpectedly, DO Home 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 DO Home will offset losses from the drop in DO Home's long position.
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The idea behind Oppein Home Group and DO Home Collection 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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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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