Correlation Between Omnijoi Media and Shanghai Friendess

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

Diversification Opportunities for Omnijoi Media and Shanghai Friendess

-0.27

Correlation Coefficient

Omnijoi Media  Shanghai Friendess

Very good diversification

The 3 months correlation between Omnijoi and Shanghai is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Omnijoi Media Corp and Shanghai Friendess Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Friendess 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 Shanghai Friendess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Friendess has no effect on the direction of Omnijoi Media i.e., Omnijoi Media and Shanghai Friendess go up and down completely randomly.

Pair Corralation between Omnijoi Media and Shanghai Friendess

Assuming the 90 days trading horizon Omnijoi Media Corp is expected to under-perform the Shanghai Friendess. In addition to that, Omnijoi Media is 1.28 times more volatile than Shanghai Friendess Electronics. It trades about -0.13 of its total potential returns per unit of risk. Shanghai Friendess Electronics is currently generating about 0.01 per unit of volatility. If you would invest  18,990  in Shanghai Friendess Electronics on December 10, 2024 and sell it today you would lose (326.00) from holding Shanghai Friendess Electronics or give up 1.72% of portfolio value over 90 days.

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

Omnijoi Media Corp  vs.  Shanghai Friendess Electronics

Omnijoi Media Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Omnijoi Media Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Shanghai Friendess

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shanghai Friendess Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shanghai Friendess 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 Shanghai Friendess

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

The idea behind Omnijoi Media Corp and Shanghai Friendess Electronics 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.