Correlation Between OOhMedia and Challenger
Can any of the company-specific risk be diversified away by investing in both OOhMedia and Challenger 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 OOhMedia and Challenger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between oOhMedia and Challenger, you can compare the effects of market volatilities on OOhMedia and Challenger 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 OOhMedia with a short position of Challenger. Check out your portfolio center. Please also check ongoing floating volatility patterns of OOhMedia and Challenger.
Diversification Opportunities for OOhMedia and Challenger
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OOhMedia and Challenger is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding oOhMedia and Challenger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Challenger and OOhMedia 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 oOhMedia are associated (or correlated) with Challenger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Challenger has no effect on the direction of OOhMedia i.e., OOhMedia and Challenger go up and down completely randomly.
Pair Corralation between OOhMedia and Challenger
Assuming the 90 days trading horizon oOhMedia is expected to generate 1.69 times more return on investment than Challenger. However, OOhMedia is 1.69 times more volatile than Challenger. It trades about 0.17 of its potential returns per unit of risk. Challenger is currently generating about 0.12 per unit of risk. If you would invest 116.00 in oOhMedia on October 20, 2024 and sell it today you would earn a total of 7.00 from holding oOhMedia or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
oOhMedia vs. Challenger
Performance |
| Timeline |
| oOhMedia |
| Challenger |
OOhMedia and Challenger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OOhMedia and Challenger
The main advantage of trading using opposite OOhMedia and Challenger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OOhMedia position performs unexpectedly, Challenger 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 Challenger will offset losses from the drop in Challenger's long position.| OOhMedia vs. Liberty Financial Group | OOhMedia vs. Perpetual Credit Income | OOhMedia vs. K2 Asset Management | OOhMedia vs. Insurance Australia Group |
| Challenger vs. Hammer Metals | Challenger vs. ACDC Metals | Challenger vs. Centaurus Metals | Challenger vs. Centrex Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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