Correlation Between OSB GROUP and TIMBERCREEK FINL

Can any of the company-specific risk be diversified away by investing in both OSB GROUP and TIMBERCREEK FINL 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 OSB GROUP and TIMBERCREEK FINL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between OSB GROUP PLC and TIMBERCREEK FINL, you can compare the effects of market volatilities on OSB GROUP and TIMBERCREEK FINL 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 OSB GROUP with a short position of TIMBERCREEK FINL. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSB GROUP and TIMBERCREEK FINL.

Diversification Opportunities for OSB GROUP and TIMBERCREEK FINL

-0.14

Correlation Coefficient

OSB GROUP  TIMBERCREEK FINL

Good diversification

The 3 months correlation between OSB and TIMBERCREEK is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding OSB GROUP PLC and TIMBERCREEK FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMBERCREEK FINL and OSB 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 OSB GROUP PLC are associated (or correlated) with TIMBERCREEK FINL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMBERCREEK FINL has no effect on the direction of OSB GROUP i.e., OSB GROUP and TIMBERCREEK FINL go up and down completely randomly.

Pair Corralation between OSB GROUP and TIMBERCREEK FINL

Assuming the 90 days horizon OSB GROUP PLC is expected to generate 1.43 times more return on investment than TIMBERCREEK FINL. However, OSB GROUP is 1.43 times more volatile than TIMBERCREEK FINL. It trades about -0.01 of its potential returns per unit of risk. TIMBERCREEK FINL is currently generating about -0.24 per unit of risk. If you would invest  472.00  in OSB GROUP PLC on September 23, 2024 and sell it today you would lose (6.00) from holding OSB GROUP PLC or give up 1.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

OSB GROUP PLC  vs.  TIMBERCREEK FINL

OSB GROUP PLC

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OSB GROUP PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, OSB GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

TIMBERCREEK FINL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TIMBERCREEK FINL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with OSB GROUP and TIMBERCREEK FINL

The main advantage of trading using opposite OSB GROUP and TIMBERCREEK FINL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSB GROUP position performs unexpectedly, TIMBERCREEK FINL 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 TIMBERCREEK FINL will offset losses from the drop in TIMBERCREEK FINL's long position.

The idea behind OSB GROUP PLC and TIMBERCREEK FINL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.