Correlation Between Omni Small-cap and Edward Jones

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

By analyzing existing cross correlation between Omni Small Cap Value and Edward Jones Money, you can compare the effects of market volatilities on Omni Small-cap and Edward Jones 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 Omni Small-cap with a short position of Edward Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and Edward Jones.

Diversification Opportunities for Omni Small-cap and Edward Jones

0.0

Correlation Coefficient

Omni Small-cap  Edward Jones

Pay attention - limited upside

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

Pair Corralation between Omni Small-cap and Edward Jones

Assuming the 90 days horizon Omni Small-cap is expected to generate 19.12 times less return on investment than Edward Jones. But when comparing it to its historical volatility, Omni Small Cap Value is 10.82 times less risky than Edward Jones. It trades about 0.02 of its potential returns per unit of risk. Edward Jones Money is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Edward Jones Money on October 23, 2024 and sell it today you would earn a total of  5.00  from holding Edward Jones Money or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Omni Small Cap Value  vs.  Edward Jones Money

Omni Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omni Small Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Omni Small-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Edward Jones Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Edward Jones Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Edward Jones is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Omni Small-cap and Edward Jones

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

The idea behind Omni Small Cap Value and Edward Jones Money 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.