Correlation Between Olympia Financial and North American
Can any of the company-specific risk be diversified away by investing in both Olympia Financial and North American 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 Olympia Financial and North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympia Financial Group and North American Financial, you can compare the effects of market volatilities on Olympia Financial and North American 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 Olympia Financial with a short position of North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and North American.
Diversification Opportunities for Olympia Financial and North American
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Olympia and North is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group and North American Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Financial and Olympia Financial 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 Olympia Financial Group are associated (or correlated) with North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Financial has no effect on the direction of Olympia Financial i.e., Olympia Financial and North American go up and down completely randomly.
Pair Corralation between Olympia Financial and North American
Assuming the 90 days trading horizon Olympia Financial Group is expected to generate 1.09 times more return on investment than North American. However, Olympia Financial is 1.09 times more volatile than North American Financial. It trades about 0.15 of its potential returns per unit of risk. North American Financial is currently generating about 0.05 per unit of risk. If you would invest 10,242 in Olympia Financial Group on September 14, 2024 and sell it today you would earn a total of 393.00 from holding Olympia Financial Group or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympia Financial Group vs. North American Financial
Performance |
| Timeline |
| Olympia Financial |
| North American Financial |
Olympia Financial and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympia Financial and North American
The main advantage of trading using opposite Olympia Financial and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia Financial position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.| Olympia Financial vs. Firm Capital Mortgage | Olympia Financial vs. Atrium Mortgage Investment | Olympia Financial vs. MCAN Mortgage | Olympia Financial vs. Chesswood Group Limited |
| North American vs. Berkshire Hathaway CDR | North American vs. E L Financial Corp | North American vs. E L Financial 3 | North American vs. Molson Coors Canada |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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