Correlation Between Old Dominion and Bank Of The

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

By analyzing existing cross correlation between Old Dominion Freight and Bank, you can compare the effects of market volatilities on Old Dominion and Bank Of The 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 Old Dominion with a short position of Bank Of The. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Bank Of The.

Diversification Opportunities for Old Dominion and Bank Of The

0.33

Correlation Coefficient

Old Dominion  Bank Of The

Weak diversification

The 3 months correlation between Old and Bank is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Of The and Old Dominion 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 Old Dominion Freight are associated (or correlated) with Bank Of The. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Of The has no effect on the direction of Old Dominion i.e., Old Dominion and Bank Of The go up and down completely randomly.

Pair Corralation between Old Dominion and Bank Of The

If you would invest  20,399  in Old Dominion Freight on September 4, 2024 and sell it today you would earn a total of  2,086  from holding Old Dominion Freight or generate 10.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Old Dominion Freight  vs.  Bank

Old Dominion Freight

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Old Dominion Freight are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Old Dominion disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bank Of The

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Bank Of The is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Old Dominion and Bank Of The

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

The idea behind Old Dominion Freight and Bank 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.