Correlation Between Opus Magnum and Hong Yuan
Can any of the company-specific risk be diversified away by investing in both Opus Magnum and Hong Yuan 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 Opus Magnum and Hong Yuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opus Magnum Ameris and Hong Yuan Holding, you can compare the effects of market volatilities on Opus Magnum and Hong Yuan 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 Opus Magnum with a short position of Hong Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opus Magnum and Hong Yuan.
Diversification Opportunities for Opus Magnum and Hong Yuan
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Opus and Hong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Opus Magnum Ameris and Hong Yuan Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Yuan Holding and Opus Magnum 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 Opus Magnum Ameris are associated (or correlated) with Hong Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Yuan Holding has no effect on the direction of Opus Magnum i.e., Opus Magnum and Hong Yuan go up and down completely randomly.
Pair Corralation between Opus Magnum and Hong Yuan
Given the investment horizon of 90 days Opus Magnum is expected to generate 1.49 times less return on investment than Hong Yuan. In addition to that, Opus Magnum is 1.57 times more volatile than Hong Yuan Holding. It trades about 0.06 of its total potential returns per unit of risk. Hong Yuan Holding is currently generating about 0.15 per unit of volatility. If you would invest 5.64 in Hong Yuan Holding on September 4, 2024 and sell it today you would lose (3.22) from holding Hong Yuan Holding or give up 57.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Opus Magnum Ameris vs. Hong Yuan Holding
Performance |
| Timeline |
| Opus Magnum Ameris |
| Hong Yuan Holding |
Opus Magnum and Hong Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opus Magnum and Hong Yuan
The main advantage of trading using opposite Opus Magnum and Hong Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opus Magnum position performs unexpectedly, Hong Yuan 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 Hong Yuan will offset losses from the drop in Hong Yuan's long position.| Opus Magnum vs. Cintas | Opus Magnum vs. Thomson Reuters Corp | Opus Magnum vs. Global Payments | Opus Magnum vs. RB Global |
| Hong Yuan vs. Manaris Corp | Hong Yuan vs. Green Planet Bio | Hong Yuan vs. Continental Beverage Brands | Hong Yuan vs. Opus Magnum Ameris |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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