Correlation Between Omega Flex and IDEX
Can any of the company-specific risk be diversified away by investing in both Omega Flex and IDEX 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 Omega Flex and IDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omega Flex and IDEX Corporation, you can compare the effects of market volatilities on Omega Flex and IDEX 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 Omega Flex with a short position of IDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Flex and IDEX.
Diversification Opportunities for Omega Flex and IDEX
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Omega and IDEX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Omega Flex and IDEX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX and Omega Flex 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 Omega Flex are associated (or correlated) with IDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX has no effect on the direction of Omega Flex i.e., Omega Flex and IDEX go up and down completely randomly.
Pair Corralation between Omega Flex and IDEX
Given the investment horizon of 90 days Omega Flex is expected to under-perform the IDEX. In addition to that, Omega Flex is 1.77 times more volatile than IDEX Corporation. It trades about -0.05 of its total potential returns per unit of risk. IDEX Corporation is currently generating about 0.01 per unit of volatility. If you would invest 22,812 in IDEX Corporation on August 27, 2024 and sell it today you would earn a total of 438.00 from holding IDEX Corporation or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Flex vs. IDEX Corp.
Performance |
| Timeline |
| Omega Flex |
| IDEX |
Omega Flex and IDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Flex and IDEX
The main advantage of trading using opposite Omega Flex and IDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Flex position performs unexpectedly, IDEX 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 IDEX will offset losses from the drop in IDEX's long position.| Omega Flex vs. Helios Technologies | Omega Flex vs. Enpro Industries | Omega Flex vs. Luxfer Holdings PLC | Omega Flex vs. Hurco Companies |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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