Correlation Between Brikor and Omnia Holdings

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

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

Diversification Opportunities for Brikor and Omnia Holdings

0.55

Correlation Coefficient

Brikor  Omnia Holdings

Very weak diversification

The 3 months correlation between Brikor and Omnia is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Brikor and Omnia Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnia Holdings and Brikor 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 Brikor are associated (or correlated) with Omnia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnia Holdings has no effect on the direction of Brikor i.e., Brikor and Omnia Holdings go up and down completely randomly.

Pair Corralation between Brikor and Omnia Holdings

Assuming the 90 days trading horizon Brikor is expected to generate 3.56 times more return on investment than Omnia Holdings. However, Brikor is 3.56 times more volatile than Omnia Holdings Limited. It trades about 0.02 of its potential returns per unit of risk. Omnia Holdings Limited is currently generating about 0.05 per unit of risk. If you would invest  1,600  in Brikor on September 27, 2024 and sell it today you would lose (200.00) from holding Brikor or give up 12.5% of portfolio value over 90 days.

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

Brikor  vs.  Omnia Holdings Limited

Brikor

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brikor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Brikor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Omnia Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Omnia Holdings Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Omnia Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Brikor and Omnia Holdings

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

The idea behind Brikor and Omnia Holdings Limited 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.