Correlation Between Omnijoi Media and Shenzhen

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

Diversification Opportunities for Omnijoi Media and Shenzhen

0.64

Correlation Coefficient

Omnijoi Media  Shenzhen

Poor diversification

The 3 months correlation between Omnijoi and Shenzhen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Omnijoi Media Corp and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display 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 Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Omnijoi Media i.e., Omnijoi Media and Shenzhen go up and down completely randomly.

Pair Corralation between Omnijoi Media and Shenzhen

Assuming the 90 days trading horizon Omnijoi Media Corp is expected to under-perform the Shenzhen. In addition to that, Omnijoi Media is 1.29 times more volatile than Shenzhen AV Display Co. It trades about -0.36 of its total potential returns per unit of risk. Shenzhen AV Display Co is currently generating about -0.13 per unit of volatility. If you would invest  3,362  in Shenzhen AV Display Co on October 11, 2024 and sell it today you would lose (329.00) from holding Shenzhen AV Display Co or give up 9.79% of portfolio value over 90 days.

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

Omnijoi Media Corp  vs.  Shenzhen AV Display Co

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.

Shenzhen AV Display

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen AV Display Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shenzhen 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 Shenzhen

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

The idea behind Omnijoi Media Corp and Shenzhen AV Display Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.