Correlation Between General Interface and Onano Industrial

Can any of the company-specific risk be diversified away by investing in both General Interface and Onano Industrial 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 General Interface and Onano Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between General Interface Solution and Onano Industrial Corp, you can compare the effects of market volatilities on General Interface and Onano Industrial 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 General Interface with a short position of Onano Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Interface and Onano Industrial.

Diversification Opportunities for General Interface and Onano Industrial

0.69

Correlation Coefficient

General Interface  Onano Industrial

Poor diversification

The 3 months correlation between General and Onano is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding General Interface Solution and Onano Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onano Industrial Corp and General Interface 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 General Interface Solution are associated (or correlated) with Onano Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onano Industrial Corp has no effect on the direction of General Interface i.e., General Interface and Onano Industrial go up and down completely randomly.

Pair Corralation between General Interface and Onano Industrial

Assuming the 90 days trading horizon General Interface Solution is expected to under-perform the Onano Industrial. But the stock apears to be less risky and, when comparing its historical volatility, General Interface Solution is 1.54 times less risky than Onano Industrial. The stock trades about -0.05 of its potential returns per unit of risk. The Onano Industrial Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,145  in Onano Industrial Corp on October 26, 2024 and sell it today you would earn a total of  905.00  from holding Onano Industrial Corp or generate 42.19% return on investment over 90 days.

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

General Interface Solution  vs.  Onano Industrial Corp

General Interface

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days General Interface Solution has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Onano Industrial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onano Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with General Interface and Onano Industrial

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

The idea behind General Interface Solution and Onano Industrial Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.