Correlation Between Flagship Investments and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Flagship Investments 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 Flagship Investments and OOhMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and oOhMedia, you can compare the effects of market volatilities on Flagship Investments 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 Flagship Investments with a short position of OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and OOhMedia.
Diversification Opportunities for Flagship Investments and OOhMedia
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flagship and OOhMedia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia and Flagship Investments 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 Flagship Investments 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 Flagship Investments i.e., Flagship Investments and OOhMedia go up and down completely randomly.
Pair Corralation between Flagship Investments and OOhMedia
Assuming the 90 days trading horizon Flagship Investments is expected to generate 0.76 times more return on investment than OOhMedia. However, Flagship Investments is 1.31 times less risky than OOhMedia. It trades about 0.05 of its potential returns per unit of risk. oOhMedia is currently generating about -0.06 per unit of risk. If you would invest 189.00 in Flagship Investments on November 21, 2024 and sell it today you would earn a total of 29.00 from holding Flagship Investments or generate 15.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Flagship Investments vs. oOhMedia
Performance |
Timeline |
Flagship Investments |
oOhMedia |
Flagship Investments and OOhMedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flagship Investments and OOhMedia
The main advantage of trading using opposite Flagship Investments and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments 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.Flagship Investments vs. Truscott Mining Corp | ||
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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