Correlation Between Omnijoi Media and Longmaster Information

Can any of the company-specific risk be diversified away by investing in both Omnijoi Media and Longmaster Information 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 Longmaster Information 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 Longmaster Information Tech, you can compare the effects of market volatilities on Omnijoi Media and Longmaster Information 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 Longmaster Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnijoi Media and Longmaster Information.

Diversification Opportunities for Omnijoi Media and Longmaster Information

0.9

Correlation Coefficient

Omnijoi Media  Longmaster Information

Almost no diversification

The 3 months correlation between Omnijoi and Longmaster is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Omnijoi Media Corp and Longmaster Information Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longmaster Information 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 Longmaster Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longmaster Information has no effect on the direction of Omnijoi Media i.e., Omnijoi Media and Longmaster Information go up and down completely randomly.

Pair Corralation between Omnijoi Media and Longmaster Information

Assuming the 90 days trading horizon Omnijoi Media Corp is expected to under-perform the Longmaster Information. In addition to that, Omnijoi Media is 1.48 times more volatile than Longmaster Information Tech. It trades about -0.36 of its total potential returns per unit of risk. Longmaster Information Tech is currently generating about -0.48 per unit of volatility. If you would invest  1,907  in Longmaster Information Tech on October 11, 2024 and sell it today you would lose (502.00) from holding Longmaster Information Tech or give up 26.32% of portfolio value over 90 days.

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

Omnijoi Media Corp  vs.  Longmaster Information Tech

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.

Longmaster Information

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Longmaster Information Tech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Longmaster Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Omnijoi Media and Longmaster Information

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

The idea behind Omnijoi Media Corp and Longmaster Information Tech 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.