Correlation Between Omnijoi Media and Zoomlion Heavy

Can any of the company-specific risk be diversified away by investing in both Omnijoi Media and Zoomlion Heavy 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 Omnijoi Media and Zoomlion Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Omnijoi Media Corp and Zoomlion Heavy Industry, you can compare the effects of market volatilities on Omnijoi Media and Zoomlion Heavy 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 Omnijoi Media with a short position of Zoomlion Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnijoi Media and Zoomlion Heavy.

Diversification Opportunities for Omnijoi Media and Zoomlion Heavy

0.17

Correlation Coefficient

Omnijoi Media  Zoomlion Heavy

Average diversification

The 3 months correlation between Omnijoi and Zoomlion is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Omnijoi Media Corp and Zoomlion Heavy Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomlion Heavy Industry and Omnijoi Media 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 Omnijoi Media Corp are associated (or correlated) with Zoomlion Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomlion Heavy Industry has no effect on the direction of Omnijoi Media i.e., Omnijoi Media and Zoomlion Heavy go up and down completely randomly.

Pair Corralation between Omnijoi Media and Zoomlion Heavy

Assuming the 90 days trading horizon Omnijoi Media Corp is expected to generate 2.91 times more return on investment than Zoomlion Heavy. However, Omnijoi Media is 2.91 times more volatile than Zoomlion Heavy Industry. It trades about 0.05 of its potential returns per unit of risk. Zoomlion Heavy Industry is currently generating about 0.01 per unit of risk. If you would invest  767.00  in Omnijoi Media Corp on October 11, 2024 and sell it today you would earn a total of  62.00  from holding Omnijoi Media Corp or generate 8.08% return on investment over 90 days.

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

Omnijoi Media Corp  vs.  Zoomlion Heavy Industry

Omnijoi Media Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Omnijoi Media Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Omnijoi Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Zoomlion Heavy Industry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zoomlion Heavy Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Zoomlion Heavy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Omnijoi Media and Zoomlion Heavy

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

The idea behind Omnijoi Media Corp and Zoomlion Heavy Industry 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.