Correlation Between OFX Group and Armada Mercantile
Can any of the company-specific risk be diversified away by investing in both OFX Group and Armada Mercantile 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 OFX Group and Armada Mercantile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFX Group Ltd and Armada Mercantile, you can compare the effects of market volatilities on OFX Group and Armada Mercantile 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 OFX Group with a short position of Armada Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and Armada Mercantile.
Diversification Opportunities for OFX Group and Armada Mercantile
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between OFX and Armada is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding OFX Group Ltd and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and OFX Group 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 OFX Group Ltd are associated (or correlated) with Armada Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Mercantile has no effect on the direction of OFX Group i.e., OFX Group and Armada Mercantile go up and down completely randomly.
Pair Corralation between OFX Group and Armada Mercantile
If you would invest 26.00 in Armada Mercantile on November 2, 2024 and sell it today you would lose (6.00) from holding Armada Mercantile or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFX Group Ltd vs. Armada Mercantile
Performance |
| Timeline |
| OFX Group |
| Armada Mercantile |
OFX Group and Armada Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFX Group and Armada Mercantile
The main advantage of trading using opposite OFX Group and Armada Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFX Group position performs unexpectedly, Armada Mercantile 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 Armada Mercantile will offset losses from the drop in Armada Mercantile's long position.| OFX Group vs. Mitsubishi UFJ Lease | OFX Group vs. First Ship Lease | OFX Group vs. Arhaus Inc | OFX Group vs. Ryder System |
| Armada Mercantile vs. SPENN Technology AS | Armada Mercantile vs. Arcane Crypto AB | Armada Mercantile vs. OFX Group Ltd | Armada Mercantile vs. Blockmate Ventures |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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