Correlation Between Omnia Holdings and Bidvest
Can any of the company-specific risk be diversified away by investing in both Omnia Holdings and Bidvest 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 Bidvest 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 Bidvest Group, you can compare the effects of market volatilities on Omnia Holdings and Bidvest 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 Bidvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnia Holdings and Bidvest.
Diversification Opportunities for Omnia Holdings and Bidvest
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Omnia and Bidvest is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Omnia Holdings Limited and Bidvest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bidvest Group 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 Bidvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bidvest Group has no effect on the direction of Omnia Holdings i.e., Omnia Holdings and Bidvest go up and down completely randomly.
Pair Corralation between Omnia Holdings and Bidvest
Assuming the 90 days trading horizon Omnia Holdings Limited is expected to generate 0.91 times more return on investment than Bidvest. However, Omnia Holdings Limited is 1.1 times less risky than Bidvest. It trades about 0.05 of its potential returns per unit of risk. Bidvest Group is currently generating about 0.01 per unit of risk. If you would invest 613,600 in Omnia Holdings Limited on September 14, 2024 and sell it today you would earn a total of 127,300 from holding Omnia Holdings Limited or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Omnia Holdings Limited vs. Bidvest Group
Performance |
| Timeline |
| Omnia Holdings |
| Bidvest Group |
Omnia Holdings and Bidvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omnia Holdings and Bidvest
The main advantage of trading using opposite Omnia Holdings and Bidvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnia Holdings position performs unexpectedly, Bidvest 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 Bidvest will offset losses from the drop in Bidvest's long position.| Omnia Holdings vs. Bidvest Group | Omnia Holdings vs. Kap Industrial Holdings | Omnia Holdings vs. Hosken Consolidated Investments | Omnia Holdings vs. Deneb 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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