Correlation Between Watts Water and Omega Flex
Can any of the company-specific risk be diversified away by investing in both Watts Water and Omega Flex 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 Watts Water and Omega Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Watts Water Technologies and Omega Flex, you can compare the effects of market volatilities on Watts Water and Omega Flex 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 Watts Water with a short position of Omega Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Watts Water and Omega Flex.
Diversification Opportunities for Watts Water and Omega Flex
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Watts and Omega is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Watts Water Technologies and Omega Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Flex and Watts Water 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 Watts Water Technologies are associated (or correlated) with Omega Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Flex has no effect on the direction of Watts Water i.e., Watts Water and Omega Flex go up and down completely randomly.
Pair Corralation between Watts Water and Omega Flex
Considering the 90-day investment horizon Watts Water Technologies is expected to generate 1.19 times more return on investment than Omega Flex. However, Watts Water is 1.19 times more volatile than Omega Flex. It trades about 0.08 of its potential returns per unit of risk. Omega Flex is currently generating about -0.19 per unit of risk. If you would invest 20,745 in Watts Water Technologies on November 18, 2024 and sell it today you would earn a total of 642.00 from holding Watts Water Technologies or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Watts Water Technologies vs. Omega Flex
Performance |
| Timeline |
| Watts Water Technologies |
| Omega Flex |
Watts Water and Omega Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Watts Water and Omega Flex
The main advantage of trading using opposite Watts Water and Omega Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Watts Water position performs unexpectedly, Omega Flex 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 Omega Flex will offset losses from the drop in Omega Flex's long position.| Watts Water vs. IDEX Corporation | Watts Water vs. Donaldson | Watts Water vs. Gorman Rupp | Watts Water vs. Enerpac Tool Group |
| Omega Flex vs. Helios Technologies | Omega Flex vs. Enpro Industries | Omega Flex vs. Luxfer Holdings PLC | Omega Flex vs. Hurco Companies |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |