Correlation Between Omni Small-cap and Miller Opportunity
Can any of the company-specific risk be diversified away by investing in both Omni Small-cap and Miller Opportunity 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 Omni Small-cap and Miller Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and Miller Opportunity Trust, you can compare the effects of market volatilities on Omni Small-cap and Miller Opportunity 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 Omni Small-cap with a short position of Miller Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and Miller Opportunity.
Diversification Opportunities for Omni Small-cap and Miller Opportunity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Omni and Miller is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and Miller Opportunity Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Opportunity Trust and Omni Small-cap 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 Omni Small Cap Value are associated (or correlated) with Miller Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Opportunity Trust has no effect on the direction of Omni Small-cap i.e., Omni Small-cap and Miller Opportunity go up and down completely randomly.
Pair Corralation between Omni Small-cap and Miller Opportunity
Assuming the 90 days horizon Omni Small-cap is expected to generate 1.71 times less return on investment than Miller Opportunity. In addition to that, Omni Small-cap is 1.39 times more volatile than Miller Opportunity Trust. It trades about 0.1 of its total potential returns per unit of risk. Miller Opportunity Trust is currently generating about 0.25 per unit of volatility. If you would invest 3,636 in Miller Opportunity Trust on August 30, 2024 and sell it today you would earn a total of 449.00 from holding Miller Opportunity Trust or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. Miller Opportunity Trust
Performance |
| Timeline |
| Omni Small Cap |
| Miller Opportunity Trust |
Omni Small-cap and Miller Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small-cap and Miller Opportunity
The main advantage of trading using opposite Omni Small-cap and Miller Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small-cap position performs unexpectedly, Miller Opportunity 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 Miller Opportunity will offset losses from the drop in Miller Opportunity's long position.| Omni Small-cap vs. Lord Abbett Diversified | Omni Small-cap vs. Tiaa Cref Smallmid Cap Equity | Omni Small-cap vs. Tiaa Cref Small Cap Blend | Omni Small-cap vs. Guggenheim Diversified Income |
| Miller Opportunity vs. Allianzgi Technology Fund | Miller Opportunity vs. Goldman Sachs Technology | Miller Opportunity vs. Technology Ultrasector Profund | Miller Opportunity vs. Hennessy Technology Fund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |