Correlation Between Challenger and Ora Banda
Can any of the company-specific risk be diversified away by investing in both Challenger and Ora Banda 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 Challenger and Ora Banda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Challenger and Ora Banda Mining, you can compare the effects of market volatilities on Challenger and Ora Banda 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 Challenger with a short position of Ora Banda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Challenger and Ora Banda.
Diversification Opportunities for Challenger and Ora Banda
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Challenger and Ora is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Challenger and Ora Banda Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ora Banda Mining and Challenger 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 Challenger are associated (or correlated) with Ora Banda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ora Banda Mining has no effect on the direction of Challenger i.e., Challenger and Ora Banda go up and down completely randomly.
Pair Corralation between Challenger and Ora Banda
Assuming the 90 days trading horizon Challenger is expected to under-perform the Ora Banda. But the stock apears to be less risky and, when comparing its historical volatility, Challenger is 2.13 times less risky than Ora Banda. The stock trades about -0.09 of its potential returns per unit of risk. The Ora Banda Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Ora Banda Mining on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Ora Banda Mining or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Challenger vs. Ora Banda Mining
Performance |
| Timeline |
| Challenger |
| Ora Banda Mining |
Challenger and Ora Banda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Challenger and Ora Banda
The main advantage of trading using opposite Challenger and Ora Banda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Challenger position performs unexpectedly, Ora Banda 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 Ora Banda will offset losses from the drop in Ora Banda's long position.The idea behind Challenger and Ora Banda Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ora Banda vs. Australian United Investment | Ora Banda vs. Singular Health Group | Ora Banda vs. Carlton Investments | Ora Banda vs. Epsilon Healthcare |
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 CEOs Directory module to screen CEOs from public companies around the world.
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