Correlation Between OD6 Metals and EP Financial
Can any of the company-specific risk be diversified away by investing in both OD6 Metals and EP Financial 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 OD6 Metals and EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OD6 Metals and EP Financial Group, you can compare the effects of market volatilities on OD6 Metals and EP Financial 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 OD6 Metals with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of OD6 Metals and EP Financial.
Diversification Opportunities for OD6 Metals and EP Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OD6 and EP1 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding OD6 Metals and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group and OD6 Metals 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 OD6 Metals are associated (or correlated) with EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of OD6 Metals i.e., OD6 Metals and EP Financial go up and down completely randomly.
Pair Corralation between OD6 Metals and EP Financial
Assuming the 90 days trading horizon OD6 Metals is expected to under-perform the EP Financial. In addition to that, OD6 Metals is 2.69 times more volatile than EP Financial Group. It trades about -0.01 of its total potential returns per unit of risk. EP Financial Group is currently generating about 0.06 per unit of volatility. If you would invest 42.00 in EP Financial Group on September 3, 2024 and sell it today you would earn a total of 9.00 from holding EP Financial Group or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OD6 Metals vs. EP Financial Group
Performance |
| Timeline |
| OD6 Metals |
| EP Financial Group |
OD6 Metals and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OD6 Metals and EP Financial
The main advantage of trading using opposite OD6 Metals and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OD6 Metals position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| OD6 Metals vs. Northern Star Resources | OD6 Metals vs. Evolution Mining | OD6 Metals vs. Bluescope Steel | OD6 Metals vs. Aneka Tambang Tbk |
| EP Financial vs. Audio Pixels Holdings | EP Financial vs. Iodm | EP Financial vs. TTG Fintech | EP Financial vs. Mantle Minerals Limited |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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