Correlation Between BANK CENTRAL and Omeros

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

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

Diversification Opportunities for BANK CENTRAL and Omeros

-0.65

Correlation Coefficient

BANK CENTRAL  Omeros

Excellent diversification

The 3 months correlation between BANK and Omeros is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and Omeros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omeros and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with Omeros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omeros has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and Omeros go up and down completely randomly.

Pair Corralation between BANK CENTRAL and Omeros

Assuming the 90 days trading horizon BANK CENTRAL is expected to generate 42.14 times less return on investment than Omeros. But when comparing it to its historical volatility, BANK CENTRAL ASIA is 7.04 times less risky than Omeros. It trades about 0.02 of its potential returns per unit of risk. Omeros is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  347.00  in Omeros on September 16, 2024 and sell it today you would earn a total of  372.00  from holding Omeros or generate 107.2% return on investment over 90 days.

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

BANK CENTRAL ASIA  vs.  Omeros

BANK CENTRAL ASIA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BANK CENTRAL ASIA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BANK CENTRAL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Omeros

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Omeros are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Omeros reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANK CENTRAL and Omeros

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

The idea behind BANK CENTRAL ASIA and Omeros 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.