Correlation Between One Media and Fair Oaks
Can any of the company-specific risk be diversified away by investing in both One Media and Fair Oaks 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 One Media and Fair Oaks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Media iP and Fair Oaks Income, you can compare the effects of market volatilities on One Media and Fair Oaks 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 One Media with a short position of Fair Oaks. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Media and Fair Oaks.
Diversification Opportunities for One Media and Fair Oaks
Very good diversification
The 3 months correlation between One and Fair is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP and Fair Oaks Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Oaks Income and One Media 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 One Media iP are associated (or correlated) with Fair Oaks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Oaks Income has no effect on the direction of One Media i.e., One Media and Fair Oaks go up and down completely randomly.
Pair Corralation between One Media and Fair Oaks
Assuming the 90 days trading horizon One Media iP is expected to under-perform the Fair Oaks. But the stock apears to be less risky and, when comparing its historical volatility, One Media iP is 1.17 times less risky than Fair Oaks. The stock trades about -0.09 of its potential returns per unit of risk. The Fair Oaks Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 55.00 in Fair Oaks Income on December 8, 2024 and sell it today you would earn a total of 2.00 from holding Fair Oaks Income or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Media iP vs. Fair Oaks Income
Performance |
| Timeline |
| One Media iP |
| Fair Oaks Income |
One Media and Fair Oaks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Media and Fair Oaks
The main advantage of trading using opposite One Media and Fair Oaks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media position performs unexpectedly, Fair Oaks 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 Fair Oaks will offset losses from the drop in Fair Oaks' long position.| One Media vs. Cornish Metals | ||
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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