Correlation Between OOhMedia and WA Kaolin
Can any of the company-specific risk be diversified away by investing in both OOhMedia and WA Kaolin 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 WA Kaolin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between oOhMedia and WA Kaolin, you can compare the effects of market volatilities on OOhMedia and WA Kaolin 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 WA Kaolin. Check out your portfolio center. Please also check ongoing floating volatility patterns of OOhMedia and WA Kaolin.
Diversification Opportunities for OOhMedia and WA Kaolin
Good diversification
The 3 months correlation between OOhMedia and WAK is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding oOhMedia and WA Kaolin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WA Kaolin 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 WA Kaolin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WA Kaolin has no effect on the direction of OOhMedia i.e., OOhMedia and WA Kaolin go up and down completely randomly.
Pair Corralation between OOhMedia and WA Kaolin
Assuming the 90 days trading horizon oOhMedia is expected to generate 0.51 times more return on investment than WA Kaolin. However, oOhMedia is 1.96 times less risky than WA Kaolin. It trades about 0.01 of its potential returns per unit of risk. WA Kaolin is currently generating about -0.02 per unit of risk. If you would invest 120.00 in oOhMedia on September 14, 2024 and sell it today you would lose (7.00) from holding oOhMedia or give up 5.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
oOhMedia vs. WA Kaolin
Performance |
| Timeline |
| oOhMedia |
| WA Kaolin |
OOhMedia and WA Kaolin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OOhMedia and WA Kaolin
The main advantage of trading using opposite OOhMedia and WA Kaolin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OOhMedia position performs unexpectedly, WA Kaolin 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 WA Kaolin will offset losses from the drop in WA Kaolin's long position.| OOhMedia vs. Auctus Alternative Investments | OOhMedia vs. Platinum Asia Investments | OOhMedia vs. Garda Diversified Ppty | OOhMedia vs. Gold Road Resources |
| WA Kaolin vs. Seven West Media | WA Kaolin vs. Environmental Clean Technologies | WA Kaolin vs. oOhMedia | WA Kaolin vs. Chalice Mining Limited |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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