Correlation Between OFX Group and Fund
Can any of the company-specific risk be diversified away by investing in both OFX Group and Fund 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 Fund 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 Fund Inc, you can compare the effects of market volatilities on OFX Group and Fund 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 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and Fund.
Diversification Opportunities for OFX Group and Fund
Very weak diversification
The 3 months correlation between OFX and Fund is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding OFX Group Ltd and Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fund Inc 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 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fund Inc has no effect on the direction of OFX Group i.e., OFX Group and Fund go up and down completely randomly.
Pair Corralation between OFX Group and Fund
Assuming the 90 days horizon OFX Group is expected to generate 5.01 times less return on investment than Fund. But when comparing it to its historical volatility, OFX Group Ltd is 1.57 times less risky than Fund. It trades about 0.03 of its potential returns per unit of risk. Fund Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Fund Inc on September 1, 2024 and sell it today you would earn a total of 114.00 from holding Fund Inc or generate 103.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
OFX Group Ltd vs. Fund Inc
Performance |
| Timeline |
| OFX Group |
| Fund Inc |
OFX Group and Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFX Group and Fund
The main advantage of trading using opposite OFX Group and Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFX Group position performs unexpectedly, Fund 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 Fund will offset losses from the drop in Fund's long position.| OFX Group vs. Anheuser Busch Inbev | OFX Group vs. Willamette Valley Vineyards | OFX Group vs. Ambev SA ADR | OFX Group vs. Fomento Economico Mexicano |
| Fund vs. Usio Inc | Fund vs. Fidus Investment Corp | Fund vs. RCS MediaGroup SpA | Fund vs. Uber Technologies |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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