Correlation Between IDEX and Omega Flex
Can any of the company-specific risk be diversified away by investing in both IDEX and Omega Flex 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 IDEX and Omega Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDEX Corporation and Omega Flex, you can compare the effects of market volatilities on IDEX and Omega Flex 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 IDEX with a short position of Omega Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDEX and Omega Flex.
Diversification Opportunities for IDEX and Omega Flex
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IDEX and Omega is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding IDEX Corp. and Omega Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Flex and IDEX 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 IDEX Corporation are associated (or correlated) with Omega Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Flex has no effect on the direction of IDEX i.e., IDEX and Omega Flex go up and down completely randomly.
Pair Corralation between IDEX and Omega Flex
Considering the 90-day investment horizon IDEX Corporation is expected to under-perform the Omega Flex. In addition to that, IDEX is 1.38 times more volatile than Omega Flex. It trades about -0.19 of its total potential returns per unit of risk. Omega Flex is currently generating about -0.19 per unit of volatility. If you would invest 4,077 in Omega Flex on November 18, 2024 and sell it today you would lose (285.00) from holding Omega Flex or give up 6.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDEX Corp. vs. Omega Flex
Performance |
| Timeline |
| IDEX |
| Omega Flex |
IDEX and Omega Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDEX and Omega Flex
The main advantage of trading using opposite IDEX and Omega Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDEX position performs unexpectedly, Omega Flex 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 Omega Flex will offset losses from the drop in Omega Flex's long position.The idea behind IDEX Corporation and Omega Flex 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.| Omega Flex vs. Helios Technologies | Omega Flex vs. Enpro Industries | Omega Flex vs. Luxfer Holdings PLC | Omega Flex vs. Hurco Companies |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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