Correlation Between Oak Ridge and FT Cboe
Can any of the company-specific risk be diversified away by investing in both Oak Ridge and FT Cboe 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 Oak Ridge and FT Cboe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Ridge Financial and FT Cboe Vest, you can compare the effects of market volatilities on Oak Ridge and FT Cboe 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 Oak Ridge with a short position of FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Ridge and FT Cboe.
Diversification Opportunities for Oak Ridge and FT Cboe
Very weak diversification
The 3 months correlation between Oak and KNG is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Oak Ridge Financial and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest and Oak Ridge 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 Oak Ridge Financial are associated (or correlated) with FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of Oak Ridge i.e., Oak Ridge and FT Cboe go up and down completely randomly.
Pair Corralation between Oak Ridge and FT Cboe
Given the investment horizon of 90 days Oak Ridge Financial is expected to generate 3.46 times more return on investment than FT Cboe. However, Oak Ridge is 3.46 times more volatile than FT Cboe Vest. It trades about 0.03 of its potential returns per unit of risk. FT Cboe Vest is currently generating about 0.05 per unit of risk. If you would invest 1,819 in Oak Ridge Financial on September 1, 2024 and sell it today you would earn a total of 256.00 from holding Oak Ridge Financial or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.22% |
| Values | Daily Returns |
Oak Ridge Financial vs. FT Cboe Vest
Performance |
| Timeline |
| Oak Ridge Financial |
| FT Cboe Vest |
Oak Ridge and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Ridge and FT Cboe
The main advantage of trading using opposite Oak Ridge and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Ridge position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe's long position.| Oak Ridge vs. HUMANA INC | Oak Ridge vs. SCOR PK | Oak Ridge vs. Aquagold International | Oak Ridge vs. Thrivent High Yield |
| FT Cboe vs. Global X SP | FT Cboe vs. Global X Nasdaq | FT Cboe vs. First Trust BuyWrite | FT Cboe vs. Amplify CWP Enhanced |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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