Correlation Between General Silos and ODIN Investments

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

By analyzing existing cross correlation between General Silos Storage and ODIN Investments, you can compare the effects of market volatilities on General Silos and ODIN Investments 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 General Silos with a short position of ODIN Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Silos and ODIN Investments.

Diversification Opportunities for General Silos and ODIN Investments

0.79

Correlation Coefficient

General Silos  ODIN Investments

Poor diversification

The 3 months correlation between General and ODIN is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding General Silos Storage and ODIN Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODIN Investments and General Silos 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 General Silos Storage are associated (or correlated) with ODIN Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODIN Investments has no effect on the direction of General Silos i.e., General Silos and ODIN Investments go up and down completely randomly.

Pair Corralation between General Silos and ODIN Investments

Assuming the 90 days trading horizon General Silos Storage is expected to under-perform the ODIN Investments. In addition to that, General Silos is 1.74 times more volatile than ODIN Investments. It trades about -0.04 of its total potential returns per unit of risk. ODIN Investments is currently generating about -0.06 per unit of volatility. If you would invest  198.00  in ODIN Investments on October 25, 2024 and sell it today you would lose (19.00) from holding ODIN Investments or give up 9.6% of portfolio value over 90 days.

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

General Silos Storage  vs.  ODIN Investments

General Silos Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days General Silos Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ODIN Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ODIN Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with General Silos and ODIN Investments

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

The idea behind General Silos Storage and ODIN Investments 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 Global Correlations module to find global opportunities by holding instruments from different markets.