Correlation Between OFX Group and Dun Bradstreet
Can any of the company-specific risk be diversified away by investing in both OFX Group and Dun Bradstreet 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 Dun Bradstreet 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 Dun Bradstreet Holdings, you can compare the effects of market volatilities on OFX Group and Dun Bradstreet 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 Dun Bradstreet. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and Dun Bradstreet.
Diversification Opportunities for OFX Group and Dun Bradstreet
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between OFX and Dun is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding OFX Group Ltd and Dun Bradstreet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dun Bradstreet Holdings 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 Dun Bradstreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dun Bradstreet Holdings has no effect on the direction of OFX Group i.e., OFX Group and Dun Bradstreet go up and down completely randomly.
Pair Corralation between OFX Group and Dun Bradstreet
Assuming the 90 days horizon OFX Group Ltd is expected to generate 5.96 times more return on investment than Dun Bradstreet. However, OFX Group is 5.96 times more volatile than Dun Bradstreet Holdings. It trades about 0.04 of its potential returns per unit of risk. Dun Bradstreet Holdings is currently generating about 0.07 per unit of risk. If you would invest 440.00 in OFX Group Ltd on September 19, 2024 and sell it today you would lose (5.00) from holding OFX Group Ltd or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
OFX Group Ltd vs. Dun Bradstreet Holdings
Performance |
| Timeline |
| OFX Group |
| Dun Bradstreet Holdings |
OFX Group and Dun Bradstreet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFX Group and Dun Bradstreet
The main advantage of trading using opposite OFX Group and Dun Bradstreet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFX Group position performs unexpectedly, Dun Bradstreet 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 Dun Bradstreet will offset losses from the drop in Dun Bradstreet's long position.| OFX Group vs. Griffon | OFX Group vs. Forsys Metals Corp | OFX Group vs. Olympic Steel | OFX Group vs. Agnico Eagle Mines |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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