Correlation Between OFX Group and Pinetree Capital
Can any of the company-specific risk be diversified away by investing in both OFX Group and Pinetree Capital 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 Pinetree Capital 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 Pinetree Capital, you can compare the effects of market volatilities on OFX Group and Pinetree Capital 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 Pinetree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and Pinetree Capital.
Diversification Opportunities for OFX Group and Pinetree Capital
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OFX and Pinetree is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding OFX Group Ltd and Pinetree Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinetree Capital 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 Pinetree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinetree Capital has no effect on the direction of OFX Group i.e., OFX Group and Pinetree Capital go up and down completely randomly.
Pair Corralation between OFX Group and Pinetree Capital
Assuming the 90 days horizon OFX Group Ltd is expected to generate 2.87 times more return on investment than Pinetree Capital. However, OFX Group is 2.87 times more volatile than Pinetree Capital. It trades about 0.15 of its potential returns per unit of risk. Pinetree Capital is currently generating about 0.24 per unit of risk. If you would invest 440.00 in OFX Group Ltd on August 28, 2024 and sell it today you would earn a total of 293.00 from holding OFX Group Ltd or generate 66.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFX Group Ltd vs. Pinetree Capital
Performance |
| Timeline |
| OFX Group |
| Pinetree Capital |
OFX Group and Pinetree Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFX Group and Pinetree Capital
The main advantage of trading using opposite OFX Group and Pinetree Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFX Group position performs unexpectedly, Pinetree Capital 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 Pinetree Capital will offset losses from the drop in Pinetree Capital's long position.| OFX Group vs. Bel Fuse A | OFX Group vs. Nextplat Corp | OFX Group vs. Semtech | OFX Group vs. Nextnav Acquisition Corp |
| Pinetree Capital vs. SPENN Technology AS | Pinetree Capital vs. OFX Group Ltd | Pinetree Capital vs. GreenBank Capital | Pinetree Capital vs. Arcane Crypto AB |
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 Stocks Directory module to find actively traded stocks across global markets.
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