Correlation Between OmniAb and Udemy

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

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

Diversification Opportunities for OmniAb and Udemy

0.22

Correlation Coefficient

OmniAb  Udemy

Modest diversification

The 3 months correlation between OmniAb and Udemy is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding OmniAb Inc and Udemy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Udemy Inc and OmniAb 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 OmniAb Inc are associated (or correlated) with Udemy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Udemy Inc has no effect on the direction of OmniAb i.e., OmniAb and Udemy go up and down completely randomly.

Pair Corralation between OmniAb and Udemy

Assuming the 90 days horizon OmniAb Inc is expected to generate 4.04 times more return on investment than Udemy. However, OmniAb is 4.04 times more volatile than Udemy Inc. It trades about 0.42 of its potential returns per unit of risk. Udemy Inc is currently generating about 0.08 per unit of risk. If you would invest  30.00  in OmniAb Inc on October 10, 2024 and sell it today you would earn a total of  13.00  from holding OmniAb Inc or generate 43.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	55.0%
Values	Daily Returns

OmniAb Inc  vs.  Udemy Inc

OmniAb Inc

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days OmniAb Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak forward indicators, OmniAb showed solid returns over the last few months and may actually be approaching a breakup point.

Udemy Inc

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Udemy Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Udemy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OmniAb and Udemy

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

The idea behind OmniAb Inc and Udemy Inc 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.