Correlation Between Oppein Home and Vanfund Urban

Can any of the company-specific risk be diversified away by investing in both Oppein Home and Vanfund Urban 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 Oppein Home and Vanfund Urban into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oppein Home Group and Vanfund Urban Investment, you can compare the effects of market volatilities on Oppein Home and Vanfund Urban 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 Oppein Home with a short position of Vanfund Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppein Home and Vanfund Urban.

Diversification Opportunities for Oppein Home and Vanfund Urban

0.9

Correlation Coefficient

Oppein Home  Vanfund Urban

Almost no diversification

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

Pair Corralation between Oppein Home and Vanfund Urban

Assuming the 90 days trading horizon Oppein Home Group is expected to under-perform the Vanfund Urban. But the stock apears to be less risky and, when comparing its historical volatility, Oppein Home Group is 1.26 times less risky than Vanfund Urban. The stock trades about -0.03 of its potential returns per unit of risk. The Vanfund Urban Investment is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  726.00  in Vanfund Urban Investment on September 28, 2024 and sell it today you would lose (249.00) from holding Vanfund Urban Investment or give up 34.3% of portfolio value over 90 days.

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

Oppein Home Group  vs.  Vanfund Urban Investment

Oppein Home Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oppein Home Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oppein Home sustained solid returns over the last few months and may actually be approaching a breakup point.

Vanfund Urban Investment

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Oppein Home and Vanfund Urban

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

The idea behind Oppein Home Group and Vanfund Urban Investment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.