Correlation Between Ocm Mutual and Lgm Risk

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

By analyzing existing cross correlation between Ocm Mutual Fund and Lgm Risk Managed, you can compare the effects of market volatilities on Ocm Mutual and Lgm Risk 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 Ocm Mutual with a short position of Lgm Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocm Mutual and Lgm Risk.

Diversification Opportunities for Ocm Mutual and Lgm Risk

-0.19

Correlation Coefficient

Ocm Mutual  Lgm Risk

Good diversification

The 3 months correlation between Ocm and Lgm is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ocm Mutual Fund and Lgm Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lgm Risk Managed and Ocm Mutual 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 Ocm Mutual Fund are associated (or correlated) with Lgm Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lgm Risk Managed has no effect on the direction of Ocm Mutual i.e., Ocm Mutual and Lgm Risk go up and down completely randomly.

Pair Corralation between Ocm Mutual and Lgm Risk

Assuming the 90 days horizon Ocm Mutual Fund is expected to generate 6.03 times more return on investment than Lgm Risk. However, Ocm Mutual is 6.03 times more volatile than Lgm Risk Managed. It trades about 0.03 of its potential returns per unit of risk. Lgm Risk Managed is currently generating about 0.12 per unit of risk. If you would invest  1,027  in Ocm Mutual Fund on October 12, 2024 and sell it today you would earn a total of  206.00  from holding Ocm Mutual Fund or generate 20.06% return on investment over 90 days.

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

Ocm Mutual Fund  vs.  Lgm Risk Managed

Ocm Mutual Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocm Mutual Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Lgm Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ocm Mutual and Lgm Risk

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

The idea behind Ocm Mutual Fund and Lgm Risk Managed 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.