Correlation Between ACDC Metals and OOhMedia
Can any of the company-specific risk be diversified away by investing in both ACDC Metals and OOhMedia 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 ACDC Metals and OOhMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and oOhMedia, you can compare the effects of market volatilities on ACDC Metals and OOhMedia 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 ACDC Metals with a short position of OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and OOhMedia.
Diversification Opportunities for ACDC Metals and OOhMedia
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ACDC and OOhMedia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia and ACDC Metals 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 ACDC Metals are associated (or correlated) with OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of ACDC Metals i.e., ACDC Metals and OOhMedia go up and down completely randomly.
Pair Corralation between ACDC Metals and OOhMedia
Assuming the 90 days trading horizon ACDC Metals is expected to generate 13.63 times less return on investment than OOhMedia. In addition to that, ACDC Metals is 2.37 times more volatile than oOhMedia. It trades about 0.0 of its total potential returns per unit of risk. oOhMedia is currently generating about 0.01 per unit of volatility. If you would invest 125.00 in oOhMedia on September 12, 2024 and sell it today you would lose (3.00) from holding oOhMedia or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. oOhMedia
Performance |
| Timeline |
| ACDC Metals |
| oOhMedia |
ACDC Metals and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and OOhMedia
The main advantage of trading using opposite ACDC Metals and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| ACDC Metals vs. Northern Star Resources | ACDC Metals vs. Evolution Mining | ACDC Metals vs. Bluescope Steel | ACDC Metals vs. Sandfire Resources NL |
| OOhMedia vs. Aneka Tambang Tbk | OOhMedia vs. Macquarie Group | OOhMedia vs. Challenger | OOhMedia vs. BHP Group Limited |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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