Correlation Between OAR Resources and Summerset Group
Can any of the company-specific risk be diversified away by investing in both OAR Resources and Summerset 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 OAR Resources and Summerset Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OAR Resources and Summerset Group Holdings, you can compare the effects of market volatilities on OAR Resources and Summerset 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 OAR Resources with a short position of Summerset Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OAR Resources and Summerset Group.
Diversification Opportunities for OAR Resources and Summerset Group
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OAR and Summerset is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding OAR Resources and Summerset Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summerset Group Holdings and OAR Resources 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 OAR Resources are associated (or correlated) with Summerset Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summerset Group Holdings has no effect on the direction of OAR Resources i.e., OAR Resources and Summerset Group go up and down completely randomly.
Pair Corralation between OAR Resources and Summerset Group
Assuming the 90 days trading horizon OAR Resources is expected to under-perform the Summerset Group. In addition to that, OAR Resources is 8.8 times more volatile than Summerset Group Holdings. It trades about -0.01 of its total potential returns per unit of risk. Summerset Group Holdings is currently generating about 0.06 per unit of volatility. If you would invest 1,110 in Summerset Group Holdings on October 20, 2024 and sell it today you would earn a total of 66.00 from holding Summerset Group Holdings or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OAR Resources vs. Summerset Group Holdings
Performance |
| Timeline |
| OAR Resources |
| Summerset Group Holdings |
OAR Resources and Summerset Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OAR Resources and Summerset Group
The main advantage of trading using opposite OAR Resources and Summerset Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OAR Resources position performs unexpectedly, Summerset 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 Summerset Group will offset losses from the drop in Summerset Group's long position.| OAR Resources vs. Aussie Broadband | OAR Resources vs. My Foodie Box | OAR Resources vs. Farm Pride Foods | OAR Resources vs. Step One Clothing |
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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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