Correlation Between OFX Group and Investec
Can any of the company-specific risk be diversified away by investing in both OFX Group and Investec 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 Investec 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 Investec Group, you can compare the effects of market volatilities on OFX Group and Investec 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 Investec. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and Investec.
Diversification Opportunities for OFX Group and Investec
Very good diversification
The 3 months correlation between OFX and Investec is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding OFX Group Ltd and Investec Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Group 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 Investec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Group has no effect on the direction of OFX Group i.e., OFX Group and Investec go up and down completely randomly.
Pair Corralation between OFX Group and Investec
Assuming the 90 days horizon OFX Group Ltd is expected to under-perform the Investec. In addition to that, OFX Group is 10.87 times more volatile than Investec Group. It trades about -0.01 of its total potential returns per unit of risk. Investec Group is currently generating about 0.09 per unit of volatility. If you would invest 939.00 in Investec Group on September 24, 2024 and sell it today you would earn a total of 165.00 from holding Investec Group or generate 17.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
OFX Group Ltd vs. Investec Group
Performance |
| Timeline |
| OFX Group |
| Investec Group |
OFX Group and Investec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFX Group and Investec
The main advantage of trading using opposite OFX Group and Investec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFX Group position performs unexpectedly, Investec 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 Investec will offset losses from the drop in Investec's long position.| OFX Group vs. Watsco Inc | OFX Group vs. Fastenal Company | OFX Group vs. SiteOne Landscape Supply | OFX Group vs. Ferguson Plc |
| Investec vs. Everus Construction Group | Investec vs. Cementos Pacasmayo SAA | Investec vs. Parker Hannifin | Investec vs. Allient |
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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