Correlation Between Ohio Variable and First Eagle

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

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

Diversification Opportunities for Ohio Variable and First Eagle

-0.29

Correlation Coefficient

Ohio Variable  First Eagle

Very good diversification

The 3 months correlation between Ohio and First is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ohio Variable College and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold and Ohio Variable 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 Ohio Variable College are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Gold has no effect on the direction of Ohio Variable i.e., Ohio Variable and First Eagle go up and down completely randomly.

Pair Corralation between Ohio Variable and First Eagle

Assuming the 90 days horizon Ohio Variable College is expected to generate 0.46 times more return on investment than First Eagle. However, Ohio Variable College is 2.16 times less risky than First Eagle. It trades about -0.13 of its potential returns per unit of risk. First Eagle Gold is currently generating about -0.08 per unit of risk. If you would invest  1,819  in Ohio Variable College on October 11, 2024 and sell it today you would lose (40.00) from holding Ohio Variable College or give up 2.2% of portfolio value over 90 days.

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

Ohio Variable College  vs.  First Eagle Gold

Ohio Variable College

Risk-Adjusted Performance

0 of 100

Very Weak

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

First Eagle Gold

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ohio Variable and First Eagle

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

The idea behind Ohio Variable College and First Eagle Gold 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.