Correlation Between Alarm Holdings and OLB
Can any of the company-specific risk be diversified away by investing in both Alarm Holdings and OLB 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 Alarm Holdings and OLB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alarm Holdings and OLB Group, you can compare the effects of market volatilities on Alarm Holdings and OLB 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 Alarm Holdings with a short position of OLB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alarm Holdings and OLB.
Diversification Opportunities for Alarm Holdings and OLB
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alarm and OLB is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alarm Holdings and OLB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OLB Group and Alarm Holdings 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 Alarm Holdings are associated (or correlated) with OLB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OLB Group has no effect on the direction of Alarm Holdings i.e., Alarm Holdings and OLB go up and down completely randomly.
Pair Corralation between Alarm Holdings and OLB
Given the investment horizon of 90 days Alarm Holdings is expected to generate 0.26 times more return on investment than OLB. However, Alarm Holdings is 3.78 times less risky than OLB. It trades about 0.08 of its potential returns per unit of risk. OLB Group is currently generating about 0.0 per unit of risk. If you would invest 5,819 in Alarm Holdings on August 31, 2024 and sell it today you would earn a total of 598.00 from holding Alarm Holdings or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alarm Holdings vs. OLB Group
Performance |
| Timeline |
| Alarm Holdings |
| OLB Group |
Alarm Holdings and OLB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alarm Holdings and OLB
The main advantage of trading using opposite Alarm Holdings and OLB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alarm Holdings position performs unexpectedly, OLB 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 OLB will offset losses from the drop in OLB's long position.| Alarm Holdings vs. Paycor HCM | Alarm Holdings vs. Appfolio | Alarm Holdings vs. Agilysys | Alarm Holdings vs. Alkami 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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