Correlation Between OLB and MicroStrategy Incorporated
Can any of the company-specific risk be diversified away by investing in both OLB and MicroStrategy Incorporated 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 OLB and MicroStrategy Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OLB Group and MicroStrategy Incorporated, you can compare the effects of market volatilities on OLB and MicroStrategy Incorporated 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 OLB with a short position of MicroStrategy Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of OLB and MicroStrategy Incorporated.
Diversification Opportunities for OLB and MicroStrategy Incorporated
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OLB and MicroStrategy is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding OLB Group and MicroStrategy Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroStrategy Incorporated and OLB 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 OLB Group are associated (or correlated) with MicroStrategy Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroStrategy Incorporated has no effect on the direction of OLB i.e., OLB and MicroStrategy Incorporated go up and down completely randomly.
Pair Corralation between OLB and MicroStrategy Incorporated
Considering the 90-day investment horizon OLB Group is expected to under-perform the MicroStrategy Incorporated. In addition to that, OLB is 1.12 times more volatile than MicroStrategy Incorporated. It trades about -0.1 of its total potential returns per unit of risk. MicroStrategy Incorporated is currently generating about 0.25 per unit of volatility. If you would invest 17,622 in MicroStrategy Incorporated on August 28, 2024 and sell it today you would earn a total of 17,747 from holding MicroStrategy Incorporated or generate 100.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OLB Group vs. MicroStrategy Incorporated
Performance |
| Timeline |
| OLB Group |
| MicroStrategy Incorporated |
OLB and MicroStrategy Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OLB and MicroStrategy Incorporated
The main advantage of trading using opposite OLB and MicroStrategy Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OLB position performs unexpectedly, MicroStrategy Incorporated 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 MicroStrategy Incorporated will offset losses from the drop in MicroStrategy Incorporated's long position.The idea behind OLB Group and MicroStrategy Incorporated 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.| MicroStrategy Incorporated vs. OLB Group | MicroStrategy Incorporated vs. Friendable | MicroStrategy Incorporated vs. KwikClick |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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