Correlation Between Opera and ANGI Homeservices
Can any of the company-specific risk be diversified away by investing in both Opera and ANGI Homeservices 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 Opera and ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opera and ANGI Homeservices, you can compare the effects of market volatilities on Opera and ANGI Homeservices 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 Opera with a short position of ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opera and ANGI Homeservices.
Diversification Opportunities for Opera and ANGI Homeservices
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Opera and ANGI is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Opera and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices and Opera 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 Opera are associated (or correlated) with ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Opera i.e., Opera and ANGI Homeservices go up and down completely randomly.
Pair Corralation between Opera and ANGI Homeservices
Given the investment horizon of 90 days Opera is expected to generate 0.95 times more return on investment than ANGI Homeservices. However, Opera is 1.05 times less risky than ANGI Homeservices. It trades about 0.07 of its potential returns per unit of risk. ANGI Homeservices is currently generating about 0.01 per unit of risk. If you would invest 806.00 in Opera on November 18, 2024 and sell it today you would earn a total of 1,380 from holding Opera or generate 171.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Opera vs. ANGI Homeservices
Performance |
| Timeline |
| Opera |
| ANGI Homeservices |
Opera and ANGI Homeservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opera and ANGI Homeservices
The main advantage of trading using opposite Opera and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opera position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.The idea behind Opera and ANGI Homeservices pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ANGI Homeservices vs. Match Group | ANGI Homeservices vs. Outbrain | ANGI Homeservices vs. MediaAlpha | ANGI Homeservices vs. YY Inc Class |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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