Correlation Between Fangdd Network and Ohmyhome Limited

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

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

Diversification Opportunities for Fangdd Network and Ohmyhome Limited

0.84

Correlation Coefficient

Fangdd Network  Ohmyhome Limited

Very poor diversification

The 3 months correlation between Fangdd and Ohmyhome is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fangdd Network Group and Ohmyhome Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ohmyhome Limited Ordinary and Fangdd Network 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 Fangdd Network Group are associated (or correlated) with Ohmyhome Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ohmyhome Limited Ordinary has no effect on the direction of Fangdd Network i.e., Fangdd Network and Ohmyhome Limited go up and down completely randomly.

Pair Corralation between Fangdd Network and Ohmyhome Limited

Considering the 90-day investment horizon Fangdd Network Group is expected to under-perform the Ohmyhome Limited. But the stock apears to be less risky and, when comparing its historical volatility, Fangdd Network Group is 1.37 times less risky than Ohmyhome Limited. The stock trades about -0.25 of its potential returns per unit of risk. The Ohmyhome Limited Ordinary is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  381.00  in Ohmyhome Limited Ordinary on December 26, 2024 and sell it today you would lose (122.00) from holding Ohmyhome Limited Ordinary or give up 32.02% of portfolio value over 90 days.

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

Fangdd Network Group  vs.  Ohmyhome Limited Ordinary

Fangdd Network Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fangdd Network Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ohmyhome Limited Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ohmyhome Limited Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Fangdd Network and Ohmyhome Limited

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

The idea behind Fangdd Network Group and Ohmyhome Limited Ordinary 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.