Correlation Between OM Holdings and Sherritt International
Can any of the company-specific risk be diversified away by investing in both OM Holdings and Sherritt International 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 OM Holdings and Sherritt International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OM Holdings Limited and Sherritt International, you can compare the effects of market volatilities on OM Holdings and Sherritt International 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 OM Holdings with a short position of Sherritt International. Check out your portfolio center. Please also check ongoing floating volatility patterns of OM Holdings and Sherritt International.
Diversification Opportunities for OM Holdings and Sherritt International
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OMHLF and Sherritt is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding OM Holdings Limited and Sherritt International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherritt International and OM Holdings 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 OM Holdings Limited are associated (or correlated) with Sherritt International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherritt International has no effect on the direction of OM Holdings i.e., OM Holdings and Sherritt International go up and down completely randomly.
Pair Corralation between OM Holdings and Sherritt International
If you would invest 23.00 in OM Holdings Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding OM Holdings Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OM Holdings Limited vs. Sherritt International
Performance |
| Timeline |
| OM Holdings Limited |
| Sherritt International |
OM Holdings and Sherritt International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OM Holdings and Sherritt International
The main advantage of trading using opposite OM Holdings and Sherritt International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OM Holdings position performs unexpectedly, Sherritt International 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 Sherritt International will offset losses from the drop in Sherritt International's long position.| OM Holdings vs. Sherritt International | OM Holdings vs. AMG Advanced Metallurgical | OM Holdings vs. Metals X Limited | OM Holdings vs. Interra Copper Corp |
| Sherritt International vs. South32 Limited | Sherritt International vs. NioCorp Developments Ltd | Sherritt International vs. HUMANA INC | Sherritt International vs. SCOR PK |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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