Correlation Between IZafe Group and OssDsign

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Can any of the company-specific risk be diversified away by investing in both IZafe Group and OssDsign 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 IZafe Group and OssDsign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iZafe Group AB and OssDsign AB, you can compare the effects of market volatilities on IZafe Group and OssDsign 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 IZafe Group with a short position of OssDsign. Check out your portfolio center. Please also check ongoing floating volatility patterns of IZafe Group and OssDsign.

Diversification Opportunities for IZafe Group and OssDsign

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between IZafe and OssDsign is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding iZafe Group AB and OssDsign AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OssDsign AB and IZafe Group 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 iZafe Group AB are associated (or correlated) with OssDsign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OssDsign AB has no effect on the direction of IZafe Group i.e., IZafe Group and OssDsign go up and down completely randomly.

Pair Corralation between IZafe Group and OssDsign

Assuming the 90 days trading horizon iZafe Group AB is expected to under-perform the OssDsign. In addition to that, IZafe Group is 1.35 times more volatile than OssDsign AB. It trades about -0.01 of its total potential returns per unit of risk. OssDsign AB is currently generating about 0.39 per unit of volatility. If you would invest  622.00  in OssDsign AB on September 4, 2024 and sell it today you would earn a total of  281.00  from holding OssDsign AB or generate 45.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

iZafe Group AB  vs.  OssDsign AB

 Performance 
       Timeline  
iZafe Group AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days iZafe Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, IZafe Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
OssDsign AB 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in OssDsign AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, OssDsign unveiled solid returns over the last few months and may actually be approaching a breakup point.

IZafe Group and OssDsign Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IZafe Group and OssDsign

The main advantage of trading using opposite IZafe Group and OssDsign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IZafe Group position performs unexpectedly, OssDsign 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 OssDsign will offset losses from the drop in OssDsign's long position.
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The idea behind iZafe Group AB and OssDsign AB 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.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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