Correlation Between Bidvest and Omnia Holdings
Can any of the company-specific risk be diversified away by investing in both Bidvest and Omnia Holdings 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 Bidvest and Omnia Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bidvest Group and Omnia Holdings Limited, you can compare the effects of market volatilities on Bidvest and Omnia Holdings 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 Bidvest with a short position of Omnia Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bidvest and Omnia Holdings.
Diversification Opportunities for Bidvest and Omnia Holdings
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bidvest and Omnia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bidvest Group and Omnia Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnia Holdings and Bidvest 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 Bidvest Group are associated (or correlated) with Omnia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnia Holdings has no effect on the direction of Bidvest i.e., Bidvest and Omnia Holdings go up and down completely randomly.
Pair Corralation between Bidvest and Omnia Holdings
Assuming the 90 days trading horizon Bidvest is expected to generate 3.37 times less return on investment than Omnia Holdings. In addition to that, Bidvest is 1.1 times more volatile than Omnia Holdings Limited. It trades about 0.01 of its total potential returns per unit of risk. Omnia Holdings Limited is currently generating about 0.05 per unit of volatility. If you would invest 613,600 in Omnia Holdings Limited on September 14, 2024 and sell it today you would earn a total of 127,300 from holding Omnia Holdings Limited or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Bidvest Group vs. Omnia Holdings Limited
Performance |
| Timeline |
| Bidvest Group |
| Omnia Holdings |
Bidvest and Omnia Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bidvest and Omnia Holdings
The main advantage of trading using opposite Bidvest and Omnia Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bidvest position performs unexpectedly, Omnia Holdings 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 Omnia Holdings will offset losses from the drop in Omnia Holdings' long position.| Bidvest vs. Astoria Investments | Bidvest vs. Safari Investments RSA | Bidvest vs. RCL Foods | Bidvest vs. HomeChoice Investments |
| Omnia Holdings vs. Bidvest Group | Omnia Holdings vs. Kap Industrial Holdings | Omnia Holdings vs. Hosken Consolidated Investments | Omnia Holdings vs. Deneb Investments |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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