Correlation Between Strickland Metals and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Strickland Metals and OOhMedia 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 Strickland Metals and OOhMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strickland Metals and oOhMedia, you can compare the effects of market volatilities on Strickland Metals and OOhMedia 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 Strickland Metals with a short position of OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strickland Metals and OOhMedia.
Diversification Opportunities for Strickland Metals and OOhMedia
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strickland and OOhMedia is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Strickland Metals and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia and Strickland Metals 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 Strickland Metals are associated (or correlated) with OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Strickland Metals i.e., Strickland Metals and OOhMedia go up and down completely randomly.
Pair Corralation between Strickland Metals and OOhMedia
Assuming the 90 days trading horizon Strickland Metals is expected to under-perform the OOhMedia. In addition to that, Strickland Metals is 2.75 times more volatile than oOhMedia. It trades about -0.02 of its total potential returns per unit of risk. oOhMedia is currently generating about -0.05 per unit of volatility. If you would invest 134.00 in oOhMedia on September 13, 2024 and sell it today you would lose (16.00) from holding oOhMedia or give up 11.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strickland Metals vs. oOhMedia
Performance |
| Timeline |
| Strickland Metals |
| oOhMedia |
Strickland Metals and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strickland Metals and OOhMedia
The main advantage of trading using opposite Strickland Metals and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strickland Metals position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Strickland Metals vs. Health and Plant | Strickland Metals vs. Epsilon Healthcare | Strickland Metals vs. Commonwealth Bank of | Strickland Metals vs. Global Health |
| OOhMedia vs. Event Hospitality and | OOhMedia vs. BTC Health Limited | OOhMedia vs. Spirit Telecom | OOhMedia vs. G8 Education |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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