Correlation Between MMTEC and OLB
Can any of the company-specific risk be diversified away by investing in both MMTEC and OLB 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 MMTEC and OLB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MMTEC Inc and OLB Group, you can compare the effects of market volatilities on MMTEC and OLB 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 MMTEC with a short position of OLB. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMTEC and OLB.
Diversification Opportunities for MMTEC and OLB
Modest diversification
The 3 months correlation between MMTEC and OLB is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MMTEC Inc and OLB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OLB Group and MMTEC 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 MMTEC Inc are associated (or correlated) with OLB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OLB Group has no effect on the direction of MMTEC i.e., MMTEC and OLB go up and down completely randomly.
Pair Corralation between MMTEC and OLB
Considering the 90-day investment horizon MMTEC Inc is expected to generate 2.15 times more return on investment than OLB. However, MMTEC is 2.15 times more volatile than OLB Group. It trades about 0.04 of its potential returns per unit of risk. OLB Group is currently generating about -0.06 per unit of risk. If you would invest 105.00 in MMTEC Inc on August 29, 2024 and sell it today you would lose (82.00) from holding MMTEC Inc or give up 78.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MMTEC Inc vs. OLB Group
Performance |
| Timeline |
| MMTEC Inc |
| OLB Group |
MMTEC and OLB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MMTEC and OLB
The main advantage of trading using opposite MMTEC and OLB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMTEC position performs unexpectedly, OLB 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 OLB will offset losses from the drop in OLB's long position.The idea behind MMTEC Inc and OLB Group 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.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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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