Correlation Between AURORAC and OMGC

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

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

Diversification Opportunities for AURORAC and OMGC

0.0

Correlation Coefficient

AURORAC  OMGC

Pay attention - limited upside

The 3 months correlation between AURORAC and OMGC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AURORAC and OMGC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMGC and AURORAC 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 AURORAC are associated (or correlated) with OMGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMGC has no effect on the direction of AURORAC i.e., AURORAC and OMGC go up and down completely randomly.

Pair Corralation between AURORAC and OMGC

If you would invest (100.00) in OMGC on August 30, 2024 and sell it today you would earn a total of  100.00  from holding OMGC or generate -100.0% return on investment over 90 days.

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

AURORAC  vs.  OMGC

AURORAC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AURORAC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AURORAC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

OMGC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OMGC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, OMGC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AURORAC and OMGC

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

The idea behind AURORAC and OMGC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.