Correlation Between Alto Metals and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Alto 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 Alto Metals and OOhMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alto Metals and oOhMedia, you can compare the effects of market volatilities on Alto 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 Alto Metals with a short position of OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alto Metals and OOhMedia.
Diversification Opportunities for Alto Metals and OOhMedia
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alto and OOhMedia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alto Metals and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia and Alto 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 Alto 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 Alto Metals i.e., Alto Metals and OOhMedia go up and down completely randomly.
Pair Corralation between Alto Metals and OOhMedia
Assuming the 90 days trading horizon Alto Metals is expected to generate 3.1 times more return on investment than OOhMedia. However, Alto Metals is 3.1 times more volatile than oOhMedia. It trades about 0.05 of its potential returns per unit of risk. oOhMedia is currently generating about 0.01 per unit of risk. If you would invest 5.60 in Alto Metals on September 12, 2024 and sell it today you would earn a total of 3.80 from holding Alto Metals or generate 67.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alto Metals vs. oOhMedia
Performance |
| Timeline |
| Alto Metals |
| oOhMedia |
Alto Metals and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alto Metals and OOhMedia
The main advantage of trading using opposite Alto Metals and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alto 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.| Alto Metals vs. Black Rock Mining | Alto Metals vs. Falcon Metals | Alto Metals vs. Dicker Data | Alto Metals vs. Advanced Braking Technology |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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