Correlation Between OOhMedia and Collins Foods
Can any of the company-specific risk be diversified away by investing in both OOhMedia and Collins Foods 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 Collins Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between oOhMedia and Collins Foods, you can compare the effects of market volatilities on OOhMedia and Collins Foods 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 Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of OOhMedia and Collins Foods.
Diversification Opportunities for OOhMedia and Collins Foods
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between OOhMedia and Collins is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding oOhMedia and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of OOhMedia i.e., OOhMedia and Collins Foods go up and down completely randomly.
Pair Corralation between OOhMedia and Collins Foods
Assuming the 90 days trading horizon oOhMedia is expected to generate 1.07 times more return on investment than Collins Foods. However, OOhMedia is 1.07 times more volatile than Collins Foods. It trades about -0.01 of its potential returns per unit of risk. Collins Foods is currently generating about -0.05 per unit of risk. If you would invest 138.00 in oOhMedia on September 3, 2024 and sell it today you would lose (10.00) from holding oOhMedia or give up 7.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
oOhMedia vs. Collins Foods
Performance |
| Timeline |
| oOhMedia |
| Collins Foods |
OOhMedia and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OOhMedia and Collins Foods
The main advantage of trading using opposite OOhMedia and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OOhMedia position performs unexpectedly, Collins Foods 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| OOhMedia vs. Vulcan Steel | OOhMedia vs. Champion Iron | OOhMedia vs. The Environmental Group | OOhMedia vs. Nufarm Finance NZ |
| Collins Foods vs. Westpac Banking | Collins Foods vs. Champion Iron | Collins Foods vs. iShares Global Healthcare | Collins Foods vs. Peel Mining |
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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