Correlation Between Obiz Concept and NamR SA
Can any of the company-specific risk be diversified away by investing in both Obiz Concept and NamR SA 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 Obiz Concept and NamR SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Obiz Concept SAS and NamR SA, you can compare the effects of market volatilities on Obiz Concept and NamR SA 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 Obiz Concept with a short position of NamR SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Obiz Concept and NamR SA.
Diversification Opportunities for Obiz Concept and NamR SA
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Obiz and NamR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Obiz Concept SAS and NamR SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NamR SA and Obiz Concept 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 Obiz Concept SAS are associated (or correlated) with NamR SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NamR SA has no effect on the direction of Obiz Concept i.e., Obiz Concept and NamR SA go up and down completely randomly.
Pair Corralation between Obiz Concept and NamR SA
Assuming the 90 days trading horizon Obiz Concept SAS is expected to generate 0.19 times more return on investment than NamR SA. However, Obiz Concept SAS is 5.36 times less risky than NamR SA. It trades about -0.21 of its potential returns per unit of risk. NamR SA is currently generating about -0.08 per unit of risk. If you would invest 514.00 in Obiz Concept SAS on September 5, 2024 and sell it today you would lose (58.00) from holding Obiz Concept SAS or give up 11.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Obiz Concept SAS vs. NamR SA
Performance |
| Timeline |
| Obiz Concept SAS |
| NamR SA |
Obiz Concept and NamR SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Obiz Concept and NamR SA
The main advantage of trading using opposite Obiz Concept and NamR SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Obiz Concept position performs unexpectedly, NamR SA 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 NamR SA will offset losses from the drop in NamR SA's long position.| Obiz Concept vs. NamR SA | Obiz Concept vs. Believe SAS | Obiz Concept vs. Largo SAS | Obiz Concept vs. Spartoo SAS |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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