Correlation Between Omnia Holdings and Afine Investments
Can any of the company-specific risk be diversified away by investing in both Omnia Holdings and Afine Investments 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 Omnia Holdings and Afine Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omnia Holdings Limited and Afine Investments, you can compare the effects of market volatilities on Omnia Holdings and Afine Investments 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 Omnia Holdings with a short position of Afine Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnia Holdings and Afine Investments.
Diversification Opportunities for Omnia Holdings and Afine Investments
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omnia and Afine is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Omnia Holdings Limited and Afine Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afine Investments and Omnia 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 Omnia Holdings Limited are associated (or correlated) with Afine Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afine Investments has no effect on the direction of Omnia Holdings i.e., Omnia Holdings and Afine Investments go up and down completely randomly.
Pair Corralation between Omnia Holdings and Afine Investments
Assuming the 90 days trading horizon Omnia Holdings Limited is expected to generate 0.61 times more return on investment than Afine Investments. However, Omnia Holdings Limited is 1.64 times less risky than Afine Investments. It trades about 0.19 of its potential returns per unit of risk. Afine Investments is currently generating about 0.01 per unit of risk. If you would invest 632,300 in Omnia Holdings Limited on September 3, 2024 and sell it today you would earn a total of 96,800 from holding Omnia Holdings Limited or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Omnia Holdings Limited vs. Afine Investments
Performance |
| Timeline |
| Omnia Holdings |
| Afine Investments |
Omnia Holdings and Afine Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omnia Holdings and Afine Investments
The main advantage of trading using opposite Omnia Holdings and Afine Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnia Holdings position performs unexpectedly, Afine Investments 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 Afine Investments will offset losses from the drop in Afine Investments' long position.| Omnia Holdings vs. Afine Investments | Omnia Holdings vs. Capitec Bank Holdings | Omnia Holdings vs. Safari Investments RSA | Omnia Holdings vs. Astoria Investments |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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