Correlation Between Old Market and Old Dominion
Can any of the company-specific risk be diversified away by investing in both Old Market and Old Dominion 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 Old Market and Old Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Market Capital and Old Dominion Freight, you can compare the effects of market volatilities on Old Market and Old Dominion 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 Old Market with a short position of Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Market and Old Dominion.
Diversification Opportunities for Old Market and Old Dominion
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Old is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Old Market Capital and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight and Old Market 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 Old Market Capital are associated (or correlated) with Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of Old Market i.e., Old Market and Old Dominion go up and down completely randomly.
Pair Corralation between Old Market and Old Dominion
Given the investment horizon of 90 days Old Market is expected to generate 135.93 times less return on investment than Old Dominion. But when comparing it to its historical volatility, Old Market Capital is 1.83 times less risky than Old Dominion. It trades about 0.0 of its potential returns per unit of risk. Old Dominion Freight is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 20,088 in Old Dominion Freight on August 28, 2024 and sell it today you would earn a total of 2,423 from holding Old Dominion Freight or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Market Capital vs. Old Dominion Freight
Performance |
| Timeline |
| Old Market Capital |
| Old Dominion Freight |
Old Market and Old Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Market and Old Dominion
The main advantage of trading using opposite Old Market and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Market position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.| Old Market vs. Old Dominion Freight | Old Market vs. Sphere Entertainment Co | Old Market vs. Hooker Furniture | Old Market vs. Emerson Radio |
| Old Dominion vs. Knight Transportation | Old Dominion vs. Universal Logistics Holdings | Old Dominion vs. Heartland Express | Old Dominion vs. Schneider National |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |