Correlation Between Investec and OFX Group
Can any of the company-specific risk be diversified away by investing in both Investec and OFX Group 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 Investec and OFX Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Group and OFX Group Ltd, you can compare the effects of market volatilities on Investec and OFX Group 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 Investec with a short position of OFX Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec and OFX Group.
Diversification Opportunities for Investec and OFX Group
Very good diversification
The 3 months correlation between Investec and OFX is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Investec Group and OFX Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFX Group and Investec 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 Investec Group are associated (or correlated) with OFX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFX Group has no effect on the direction of Investec i.e., Investec and OFX Group go up and down completely randomly.
Pair Corralation between Investec and OFX Group
Assuming the 90 days horizon Investec Group is expected to generate 0.1 times more return on investment than OFX Group. However, Investec Group is 10.52 times less risky than OFX Group. It trades about 0.21 of its potential returns per unit of risk. OFX Group Ltd is currently generating about -0.22 per unit of risk. If you would invest 1,062 in Investec Group on September 20, 2024 and sell it today you would earn a total of 42.00 from holding Investec Group or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Investec Group vs. OFX Group Ltd
Performance |
| Timeline |
| Investec Group |
| OFX Group |
Investec and OFX Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec and OFX Group
The main advantage of trading using opposite Investec and OFX Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec position performs unexpectedly, OFX Group 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 OFX Group will offset losses from the drop in OFX Group's long position.| Investec vs. SPENN Technology AS | Investec vs. OFX Group Ltd | Investec vs. HUMANA INC | Investec vs. Barloworld Ltd ADR |
| OFX Group vs. John Wiley Sons | OFX Group vs. Modine Manufacturing | OFX Group vs. Tesla Inc | OFX Group vs. Rivian Automotive |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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