Correlation Between OFX Group and American Premium
Can any of the company-specific risk be diversified away by investing in both OFX Group and American Premium 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 American Premium 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 American Premium Water, you can compare the effects of market volatilities on OFX Group and American Premium 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 American Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and American Premium.
Diversification Opportunities for OFX Group and American Premium
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OFX and American is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding OFX Group Ltd and American Premium Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Premium Water 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 American Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Premium Water has no effect on the direction of OFX Group i.e., OFX Group and American Premium go up and down completely randomly.
Pair Corralation between OFX Group and American Premium
If you would invest 435.00 in OFX Group Ltd on November 27, 2024 and sell it today you would earn a total of 0.00 from holding OFX Group Ltd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFX Group Ltd vs. American Premium Water
Performance |
| Timeline |
| OFX Group |
| American Premium Water |
OFX Group and American Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFX Group and American Premium
The main advantage of trading using opposite OFX Group and American Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFX Group position performs unexpectedly, American Premium 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 American Premium will offset losses from the drop in American Premium's long position.| OFX Group vs. Alternative Investment | OFX Group vs. Luxfer Holdings PLC | OFX Group vs. Freedom Holding Corp | OFX Group vs. NL Industries |
| American Premium vs. First Tractor | American Premium vs. Ag Growth International | American Premium vs. AmeraMex International | American Premium vs. Arts Way Manufacturing Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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